Barney Frank (D-Goldman Sachs, Fannie Mae, AIG) in trouble?

Maybe there's a little good ole fashion populist Irish and Swamp Yankee rebellion in Massachusetts. Barney Frank, one of the major architects of the mess leading up to the bailout, as well as the bailout itself, is in trouble. While this district heavily leans democrat and has since the 1980's, it did vote for Scott Brown, and I believe Mitt Romney.

From the Boston Herald

Gleeful Tea Partiers are licking their chops at a panic-stricken Barney Frank, who’s digging deep into his own pocket to bail out his campaign, even as his rival taps Wall Street bigwigs in a bid to force the Newton Democrat into a Martha Coakley-style collapse.
“He sees the writing on the wall — he could lose this election,” said Christen Varley of the Greater Boston Tea Party. “I think he’s realized— I hope too late — that he has a viable challenger and his constituents are not happy.”
Frank — outraised by $70,000 by opponent Sean Bielat in September — pumped $200,000 from his personal retirement account into his campaign to thwart what he calls right-wing attacks from “bigoted” Tea Partiers.

More than anyone else, two people need to be gone after this election. Target number one needed to be Chris Dodd. He's retiring. Good Riddance. The other is Barney Frank. Sean Bielat is giving Frank his toughest run in a long, long time. Frank is polling under 50%, and is up by less than 10 in the last poll I've seen. No more bailouts, and no more Barney Frank.

Why?

2003: ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Dems, Not GOP, Have Taken Side of Wall Street

How ironic that Michael Barone wrote this one day before the SEC charges against Goldman Sachs came out.

This is some good advice from Barone. From real Clear Politics

It's not hard to predict how the coming fight over financial regulation legislation will be framed by most of the mainstream media. Democrats like Christopher Dodd, the sponsor of the pending Senate bill, will be portrayed as cracking down on greedy Wall Street operators. Republicans will be portrayed as letting Wall Street operators have their way.

That might be a fair characterization if Republicans concentrate their fire on the consumer protection agency the bill would establish in the Federal Reserve. But that's a peripheral issue, and Republicans would be well advised to leave the opposition to CEOs like JPMorgan Chase's Jamie Dimon, a Democratic contributor, who argues persuasively that regulators should just do a better job of enforcing already existing rules.

The real heart of the Dodd bill is the provision creating a $50 billion fund collected from large financial firms and authorizing the FDIC to use the funds to reorganize any such firm it decides is failing. Under the bill, the FDIC would use this "resolution authority" rather than have the firm go into bankruptcy courts, as Lehman Brothers did after it collapsed in September 2008.

This sounds reassuring. But actually it's very dangerous. It amounts to granting "too big to fail" status to financial firms like Goldman Sachs and JPMorgan Chase. As my American Enterprise Institute colleague Peter Wallison and University of Pennsylvania law professor David Skeel explain in The Wall Street Journal, it tells those firms' creditors and shareholders that Uncle Sam will bail them out if they make what turn out to be imprudent loans.

...

In addition, "too big to fail" status means that, as Wallison and Skeel write, "large financial firms will be seen as protected by the government and, with lower funding costs, will squeeze out their Main Street competitors."

Little wonder that Goldman Sachs likes the idea. It will be able to borrow at lower cost than small competitors and will be assured that its large counterparties will qualify for government bailouts. Big firms tend to favor regulation because it insulates them from competition and protects them against loss.

Republicans owe no political debt to the big Wall Street firms. In the 2008 campaign cycle, according to the Center for Responsive Politics' opensecrets.org website, Goldman Sachs personnel contributed $4.5 million to Democrats and just $1.5 million to Republicans.

Add in three other big Wall Street firms -- Morgan Stanley, JPMorgan Chase and Citigroup -- and the total take was $12.7 million to Democrats and $6.7 million to Republicans. The image of Wall Streeters as solid Republicans is as dead as J. P. Morgan himself.

It's time to slam the limosine leftists which have taken over Wall Street, starting with Goldman Sachs.

Democrat hedge fund Goldman Sachs charged with civil fraud

While they are innocent till proven liable by a preponderance of the evidence, my guard's been up on Goldman Sachs for years. They have an insane amount of power in Washington. One of the biggest culprits in the economy has been the behavior of Goldman Sachs and their leaders.

From the Wall Street Journal

NEW YORK (Dow Jones)--Credit markets became jittery again Friday as a U.S. regulator filed civil fraud charges against storied Wall Street firm Goldman Sachs (GS).

The Securities and Exchange Commission said Goldman had failed to disclose to investors vital information about a synthetic collateralized debt obligation, or CDO, based on subprime mortgage-backed securities. In particular, the agency was interested in the role a major hedge played in selecting the assets included in the CDO, which the hedge fund then bet against.

"Credit markets are seeing a sizeable impact from the Goldman news," said Bill Larkin, a portfolio manager at Cabot Money Management, in Salem, Mass. "The question is, has the SEC discovered what may have been a common practice across the industry? Is this the tip of the iceberg?"

Investors will rush to "safety," Larkin added, noting that "this is impacting all markets across the globe."

The cost of protecting Goldman's debt rose sharply before backtracking a little by late afternoon. The bank's credit default swaps or CDS were quoted at 124 basis points after Thursday's close of 90 basis points, according to administrator Markit. The level had widened to 136 basis points earlier in the day.

Investors tried to figure out whether other firms or other structured finance products will be affected. They are concerned that the SEC's action may create a domino effect affecting other firms and other structured finance products. There's also the worry that this regulatory move may rattle the recovery and bring uncertainty back to the market.

This is major news, and will be even bigger if the SEC gets a judgment against Goldman Sachs (This is a civil, not criminal case). Goldman Sachs was one of the big winners in the bailout mess of 2008, with a lot of help from their buddies like Hank Paulson and Chris Dodd. To give an idea of the kind of power Goldman Sachs has:

Clinton's treasurer Bob Rubin - Goldman Sachs
Bush's treasurer Hank Paulson - Goldman Sachs
Disgraced former New Jersey Governor Jon Corzine - Goldman Sachs
Chief of Staff to Obama's treasurer Tim Geihtner, Mark Patterson - Goldman Sachs

Goldman Sachs is also overwhelmingly (although not exclusively - Paulson) democrat, unless your the auto industry hating Richard Shelby.

Lloyd Blankfein - CEO and Chairman - Donated to Richard Shelby (one of my least favorite Republicans), ACTBLUE, Mike McMahon, Chris Dodd, Hillary Clinton, Jon Corzine, John Kerry, Tom Daschle, Tom Carper, Dick Gephardt, Chuck Schumer, and Arlen Specter.

David Viniar - Chief Financial Officer - Donated to Chris Dodd, who along with Barney Frank, is one of the two most responsible for the financial mess. He also supported Tom Daschle, Chris Van Hollen, Erskine Bowles, Bob Menendez, and Barack Obama.

Gary Cohn - Chief Operating Officer - Donated to Richard Shelby, Lee Fisher (D-running for Voinovich's seat), Kirsten Gillibrand, ActBlue, Scott Murphy, Mike McMahon, Steny Hoyer, Hillary Clinton, Barack Obama, Chris Dodd, Max Baucus, Jack Reed, John Edwards, DNC, Ben Cardin, Sheldon Whitehouse, Max Baucus, Bill Nelson, Bob Menendez, Harold Ford, Jon Corzine, and Tom Daschle. In short, the biggest bunch of F'ups on the face of the earth - the US Senate.

In 2009, Forbes magazine gave Lloyd Blankfein a fitting award. The number one position in CEO Hall of Shame.

And last but not least: the divine Lloyd Blankfein (No. 1), chairman and chief executive officer of Goldman Sachs ( GS - news - people ). Despite bearing scant resemblance to, say, Mother Theresa, the Pope or the Dalai Lama, Blankfein told the Sunday Times of London in November that he was just a banker doing "God's work." He later said he meant it as a joke, but he certainly pays himself as if he were accomplishing something greater than human: In 2007 he made $73 million, according to Forbes, and only $25 million in 2008, as the economy tanked, but look for a recovery in his compensation this year as Goldman Sachs has recovered far ahead of the economy as a whole. In honor of the modesty of his pronouncement, we lift him to the celestial height of No. 1 on our list of CEO outrages of 2009.

Goldman Sachs has a long history of controversies.

From Spiegel:

Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.
...
Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date.

Fictional Exchange Rates

Such transactions are part of normal government refinancing. Europe's governments obtain funds from investors around the world by issuing bonds in yen, dollar or Swiss francs. But they need euros to pay their daily bills. Years later the bonds are repaid in the original foreign denominations.

But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.

When the subprime market gave banks a beating, Goldman Sachs on the other hand. The Guardian

Goldman's annual profits, announced on Tuesday, were up 22% to $11.6bn.

The bank's 30,000 staff will share a compensation pool of $20.1bn - amounting to $600,000 each if it was divided up equally (which, obviously, it won't be). Even certain Goldman secretaries, according to one pay expert, can expect to scoop $200,000 apiece - more than the salary of New York state's governor, Eliot Spitzer.

That's against a backdrop in which other firms are slashing jobs. Bear Stearns has crashed to the first quarterly loss in its 84-year history and has cut 9% of its workforce. Citigroup, having lost between $8bn and $11bn, is shopping for investors to boost its flagging capital adequacy ratio.

Gee, it helps to have friends in high places, like Paulson, Rubin, and Patterson. In fact, since AIG was "too big to fail" thanks to bipartisan screwups, Goldman Sachs was the winner. From Politico

the documents AIG released account for some of the more than $180 billion in aid that AIG has received, and they detailed for the first time which financial firms are benefitting from the federal handout.

In all, AIG disclosed payments of $105.3 billion between September and December 2008. And some of the biggest recipients were European banks. Societe Generale, based in France, was the top foreign recipient at $11.9 billion, Deutsche Bank of Germany got $11.8 billion and Barclays, based in England, was paid $8.5 billion.

Here in the U.S., Goldman Sachs received $12.9 billion. Edward Liddy, the government-installed CEO of AIG, sat on the board of directors of Goldman Sachs until he joined AIG.

He took the position while President George W. Bush's Treasury Secretary, Henry Paulson — who until joining the administration had served as Goldman's chairman and CEO — arranged the insurance company's initial government bailout.

Paulson again. Thanks a lot Dubya for that appointment.

This will be an interesting trial or settlement. If it goes to trial, the discovery process may be more interesting than the trial itself. One thing is for certain, regardless of the outcome, Goldman Sachs needs to be kept far from the government.

Connecticut residing Goldman Sachs man Bob Bowman for Michigan Governor? Riiiiight.

 Who is Bob Bowman? He was treasurer for Jim Blanchard, the governor most famous for flying a MSP helicopter and raising income taxes 38% during the "last one to leave turn out the lights" years. (sound familiar?) That's his claim to fame.

Other than that, he works for Major League Baseball, and used to work for Goldman Sachs.Goldman Sachs. There's a vote for confidence, after what they have done the last four years with their buddies Obama, Schumer, and Bush.

He's begin recruited because he's rich. One problem for him. He lives in Connecticut. What would someone in Connecticut get about Michigan? A vacation home in Harbor Springs on Little Traverse Bay doesn't cut it. This guy doesn't understand real Michigan. His only Michigan ties are working for Blanchard and his big money vacation home in Harbor Springs he uses as his primary address, to probably avoid the high property taxes through the homestead exemption.

Bowman told Tim Skubick that Harbor Springs was his home.If it was, why does his campaign donations say Westport Connecticut? NOTHING on the online campaign finance database comes back as Harbor Springs.

Newsmeat under name Bob Bowman - $2000 to John Edwards.(Yes, that John Edwards)

A lot of Michigan donations here but Westport is his home listed.

You have to go back to 1988 to find a Michigan address under the donor files. East Lansing. 

Under the State of Michigan files, he uses a Westport address and donated. I won't post that verbatim, as his address is listed, and I don't post addresses here unless its an office address. $2000 to state committee. Bob Bowman is a carpetbagger from Westport, Connecticutt.

What's Westport Connecticut? It's a rich town on the Long Island Sound with a $1.2 million median price.Median income, almost $200,000. Democrats for working families, huh? Riiiiight. 

We don't need a Blanchard/Goldman Sachs crony from Connecticut buying the election in our great state. Hank Paulson and Bob Rubin were both Goldman Sachs guys in charge of the US treasury. Goldman Sachs lobbyist Mark Patterson is the chief of staff to Tim Geithner. Goldman Sachs is tight with the AIG bailout.

Say Yes to Michigan. Say no to Goldman Sachs cronies.  Say no to Blanchard jr. Say no to Michigan Governor's living in Connecticut. Say no to Bob Bowman.

Strike one - Blanchard's treasurer and 38% tax increase
Strike two - Carpetbagger from Connecticut
Strike three - Goldman Sachs

Yer out!

Goldman Sachs? You gotta be kidding me...

I shouldn't expect anything less from the company that gave us Jon Corzine and Henry Paulson.

Paulson picks interim head for rescue effort

WASHINGTON - The administration has selected a former Goldman Sachs executive to be the interim head of its $700 billion rescue effort for financial institutions.

Neel Kashkari, the Treasury's assistant secretary for international affairs, was selected Monday to be the interim head of Treasury's new Office of Financial Stability.

The designation was made by Treasury Secretary Henry Paulson, who was the head of Goldman Sachs before he joined the Bush administration in 2006. Kashkari, 35, will head the office created by the emergency legislation enacted Friday to fund the largest government bailout in history.

Former Goldman Sachs head appoints his own. To say my guard is up is an understatement.