9-30-08

Eagle Scout Hank Paulson's "Plan" Makes War on the USA "Treason," Sets Himself Up to Get Needle!

Every aspect of the USA economic meltdown has been engineered by the bad guys who own our banking system, the Rothschilds, Rockefellers, James Baker III, ect out of greed and a desire to overthrow the United States and enslave the people. These bad guys are making war on the USA which is treason, punishable by death.

Rothschilds, Rockefellers, James Baker III own Goldman, Sacks, which along with them own our baking system. These bad guys have been distributed over $ 5 trillion dollars tax free from interest charged member banks because they own our banking system. What have these bad guys done with their ill gotten gains? They have invested in wars, including financing Hitler in WWII. Thus these bad guys are responsible for the Holocaust and the murder of six million Jewish people. One may say how is this possible, many of the owners of our banking system are themselves Jewish. There are good Jewish people and their are bad Jewish people, and these guys are Satan incarnate and extremely bad guys and so jaded by the greed of power and money they will murder any Jewish person, and anyone for a buck. One may say prove it to me these guys financed Hitler and the Holocaust. My simple answer is this. Guys financed Hitler and if it was not the bad guys, Rothschilds, Rockefellers, James Baker III ect, then who financed Hitler? What other bad deeds are the bad guys Rothschilds, Rockefellers, James Baker III responsible? Too many to name, but a few of their dirty tricks are, the invention of and spreading of AIDS around the world, the financing of Al Queda and the Iranian regime, and 911. This is the third time these bad guys have used war in the Mid East to manipulate the price of oil up to deliberately trigger hyperinflation and steal money from the people of the world in the process. The other two times the bad guys, Rothschilds, Rockefellers, James Baker III, manipulated oil prices up occurred in 1973 and 1979. These coward sickos have the gall to belittle others for "Affirmative Action" and yet they are the biggest beneficiaries of Affirmative Action in the history of the world.

Alan Greenspan deliberately created the economic mess we are in today by introducing unregulated derivatives on packages of mortgages and by lowering the interest rates charged member banks to basically zero, .0025%. Goldman, Sacks by being an owner of our banking system and thus directed Alan Greenspan to create the derivatives, were ready to benefit from derivatives and one can look at the Wikipedia information on Goldman, Sacks and see Goldman, Sacks has made billions off of derivatives and the banks destroyed by derivatives have lost billions off derivatives. The bad guys, Rothschilds, Rockefellers, James Baker III manipulate oil prices up and with the help of Obama adviser Paul Volcker types make trillions off of all type of commodities, oil, silver, gold, interest rates, ethanol, by buying and selling commodities they don't own, though the derivative mechanism. As past CEO of Goldman, Sacks, Hank Paulson knew about and is responsible for Alan Greenspan's bubble and derivatives deliberately created to destroy our member banks. The government bailouts have been planned by Paulson, Goldman, Sacks, and the bad guys Rothschilds, Rockefellers, James Baker III and is designed so the US government to become the Central Bank and own banks and businesses which were part of the private economic sector. This deliberate action by Paulson and others is making the USA more of a communi$t country.

What many people think is that Rothschilds, Rockefellers, James Baker III are free enterprise when in fact these bad guys invented communism and have spread communi$m to Russia, China, India and around the world. Why have the the bad guys, Rothschilds, Rockefellers, James Baker III, created communi$m? communi$m puts the people of the world in a neat package where the people own nothing and are slaves. Outside this package of horror are the bad guys, Rothschilds, Rockefellers, James Baker III, who own everything.

Will the world's economic system melt if comrade Paulson, Goldman, Sacks, and the other bad guys, Rothschilds, Rockefellers, James Baker III, don't get their government save the mortgages Affirmative Action? No one knows for sure the extent of the economic problems if the government does not bail out the world's economy. The economic problem is that people want out of the stock markets, and saving mortgages is only a small part of the world's economic problems. Once Paulson's save the mortgages Plan is implemented, logic dictates later on down the road people will want out of the stock markets for other reasons, and other save the world economy Paulson Plans will be needed. It seems to me this package of loans is for the purpose of making a loans "commodities" which can and will be traded on exchanges. The bad guy plans may include making everything on the planet a traded commodity, including people.

It is no accident Paulson's plan to save mortgages is occurring on the start of Rosh Hashanah, September 29, 2008. Jewish New Year is a time of Jewish people announcing their New Year Resolutions, and they do them by action during the time of the Jewish New Year. One may recall 911 occurred right before Rosh Hashanah. Paulson's economic bailout of bad mortgage loans give us a hint that we can expect more economic bailouts during the coming year. Also, because of the Georgia War we can expect an increase in war between Russia and the USA during the next year. YA has had talk circulating that comrade Little George intends to put the USA under martial law and cancel the 2008 Presidential elections soon, during the time of Rosh Hashanah. All this Rosh Hashanah dirty deeds point to another Holocaust of Jewish people in the future. People in misery and suffering will blame Jewish people for 911, gasoline going from $ 1.00 to $ 4.00, and demand Jewish people are punished, and one can go to the bank know Rothschilds, Rockefellers, James Baker III will be all too happy to Holocaust Jewish people. Why? To steal the money of Holocaust ed Jewish people and send it to Rothschilds, Rockefellers, James Baker III.

http://en.wikipedia.org/wiki/Goldman_Sachs

Goldman Sachs
From Wikipedia, the free encyclopedia
Jump to: navigation, search
Goldman Sachs Group, Inc.
Type Public (NYSE: GS)
Founded 1869
Founder Marcus Goldman
Headquarters New York, USA
Area served Worldwide
Key people Lloyd Blankfein (Chairman and CEO)
Gary Cohn (President and COO)
Jon Winkelried (President and COO)
Industry Finance and insurance
Products Investment banking
Financial services
Market cap US $ 65.91 billion (2007)
Revenue ? US $ 87.968 billion (2007)
Operating income ? US $ 17.604 billion (2007)
Net income ? US $ 11.599 billion (2007)
Total assets ? US $ 1.119 trillion (2007)
Total equity ? US $ 42.800 billion (2007)
Employees 30,522 (2007)
Website www.gs.com
The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS), is a large global bank holding company that engages in investment banking, securities and investment management. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street.[1] Goldman Sachs has offices in all major world financial centers. The firm acts as a financial advisor and money manager for corporations, governments, and wealthy families around the world. Goldman offers its clients mergers & acquisitions advice, underwriting services, asset management, and engages in proprietary trading, and private equity deals. It is a primary dealer in the U.S. Treasury securities market.

Contents [hide]
1 History
2 Corporate affairs
2.1 Businesses
2.1.1 Investment banking
2.1.2 Trading & Principal Investments
2.1.3 Asset management and securities services
2.2 GS Capital Partners
2.2.1 Major Assets (GS Group)
2.3 Predictions
2.4 Corporate citizenship
2.4.1 Charitable Services Group
2.4.2 Goldman Sachs Foundation
3 Notable alumni
4 Criticism and controversy
5 Goldman in the mortgage market
5.1 Actions in the subprime mortgage crisis
5.2 Goldman Sachs' Alternative Mortgage Products
5.3 Change of Status
6 Works about Goldman Sachs
7 References
8 External links

[edit] History
Goldman Sachs was founded in 1869 by German Jewish immigrant Marcus Goldman.[2] The company made a name for itself pioneering the use of commercial paper for entrepreneurs and was invited to join the New York Stock Exchange in 1896. It was during this time that Goldman's son-in-law Samuel Sachs joined the firm which prompted the name change to Goldman Sachs.

In the early 20th century, Goldman was a major player in establishing the initial public offering market. It managed one of the largest IPOs to date, that of Sears, Roebuck and Company in 1906. It also became one of the first companies to heavily recruit those with MBA degrees from leading business schools, a practice that still continues today.[citation needed]

In 1929, it launched the Goldman Sachs Trading Corp., a closed-end fund with characteristics similar to that of a Ponzi scheme. The fund failed as a result of the Stock Market Crash of 1929, hurting the firm's reputation for several years afterward.[3]

In 1930, Sidney Weinberg assumed the role of senior partner and shifted Goldman's focus away from trading and towards investment banking. It was Weinberg's actions that helped to restore some of Goldman's tarnished reputation. On the back of Weinberg, Goldman was lead advisor on the Ford Motor Company's IPO in 1956, which at the time was a major coup on Wall Street. Under Weinberg's reign the firm also started an investment research division and a municipal bond department. It also was at this time that the firm became an early innovator in risk arbitrage.

Gus Levy joined the firm in the 1950s as a well known securities trader, which started a trend at Goldman where there would be two powers generally vying for supremacy, one from investment banking and one from securities trading. For most of the 1950s and 1960's, this would be Weinberg and Levy. Levy was a pioneer in block trading and the firm established this trend under his guidance. Due to Weinberg's heavy influence at the firm, it formed an investment banking division in 1956 in an attempt to spread around influence and not focus it all on Weinberg.

In 1969, Levy took over as Senior Partner from Weinberg, and built Goldman's trading franchise once again. It is Levy who is credited with Goldman's famous philosophy of being "long term greedy," which implies that as long as money is made over the long term, trading losses in the short term are not to be worried about. That same year, Weinberg retired from the firm.

Another financial crisis for the firm occurred in 1970, when the Penn Central Railroad Company went bankrupt with over $80 million in commercial paper outstanding, most of it issued by Goldman Sachs. The bankruptcy was large, and the resulting lawsuits threatened the partnership capital and life of the firm. It was this bankruptcy that resulted in credit ratings being created for every issuer of commercial paper today by several credit rating services.[4]

During the 1970s, the firm also expanded in several ways. Under the direction of Senior Partner Stanley R. Miller, it opened its first international office in London in 1970, and created a private wealth division along with a fixed income division in 1972. It also pioneered the "white knight" strategy in 1974 during its attempts to defend Electric Storage Battery against a hostile takeover bid from International Nickel and Goldman's rival Morgan Stanley.[5] This action would boost the firm's reputation as an investment advisor because it pledged to no longer participate in hostile takeovers.

John Weinberg (the son of Sidney Weinberg), and John C. Whitehead assumed roles of co-senior partners in 1976, once again emphasizing the co-leadership at the firm. One of their most famous initiatives was the establishment of the 14 business principles[6] that are still used to this day.

In the 1980s, the firm made a major move by acquiring J. Aron & Company, a commodities trading firm which merged with the Fixed Income division to become known as Fixed Income, Currencies, and Commodities. J. Aron was a major player in the coffee and gold markets, and the current CEO of Goldman, Lloyd Blankfein, joined the firm as a result of this merger. In 1985 it underwrote the public offering of the Real Estate Investment Trust that owned Rockefeller Center, then the largest REIT offering in history. In accordance with the beginning of the collapse of the Soviet Union, the firm also became largely involved in facilitating the global privatization movement by advising companies that were spinning off from their parent governments.

In 1986, the firm formed Goldman Sachs Asset Management, which manages the majority of its mutual funds and hedge funds today. In the same year, the firm also underwrote the IPO of Microsoft, advised General Electric on its acquisition of RCA and joined the London and Tokyo stock exchanges. 1986 also was the year when Goldman became the first United States bank to rank in the top 10 of mergers and acquisitions in the United Kingdom. During the 1980s the firm became the first bank to distribute its investment research electronically and created the first public offering of original issue deep-discount bond.

Robert Rubin and Stephen Friedman assumed the Co-Senior Partnership in 1990 and pledged to focus on globalization of the firm and strengthening the Merger & Acquisition and Trading business lines. During their reign, the firm introduced paperless trading to the New York Stock exchange and lead-managed the first-ever global debt offering by a U.S. corporation. It also launched the Goldman Sachs Commodity Index (GSCI) and opened a Beijing office in 1994. It was this same year that Jon Corzine assumed leadership of the firm following the departure of Rubin and Friedman. The firm joined David Rockefeller and partners in a 50-50 join ownership of Rockefeller Center during 1994, but later sold the shares to Tishman Speyer in 2000. In 1996, Goldman was lead underwriter of the Yahoo! IPO and in 1998 it was global coordinator of the NTT DoCoMo IPO. In 1999, Henry Paulson took over as Senior Partner.

One of the largest events in the firm's history was its own IPO in 1999. The decision to go public was one that the partners debated for decades. In the end, Goldman decided to offer only a small portion of the company to the public, with some 48% still held by the partnership pool.[7] 22% of the company is held by non-partner employees, and 18% is held by retired Goldman partners and two longtime investors, Sumitomo Bank Ltd. and Hawaii's Kamehameha Activities Assn (the investing arm of Kamehameha Schools). This leaves approximately 12% of the company as being held by the public. With the firm's 1999 IPO, Henry Paulson became Chairman and Chief Executive Officer of the firm.

In 1999 Goldman acquired Hull Trading Company, one of the world's premier market-making firms, for $531 million. More recently, the firm has been busy both in investment banking and in trading activities. It purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion in September 2000. It also advised on a debt offering for the Government of China and the first electronic offering for the World Bank. It merged with JBWere, the Australian investment bank and opened a full-service broker-dealer in Brazil. It expanded its investments in companies to include Burger King, McJunkin Corporation, and in January 2007, Alliance Atlantis alongside CanWest Global Communications to own sole broadcast rights to the CSI franchise. The firm is also heavily involved in energy trading, including the oil speculation market, on both a principal and agent basis.[8]

Its sizable profits made during the 2007 Subprime mortgage financial crisis led the New York Times to proclaim that Goldman Sachs is without peer in the world of finance.[9] The firm's viability was later called into question as the crisis intensified in September 2008.

In May 2006, Henry Paulson left the firm to serve as U.S. Treasury Secretary, and Lloyd Blankfein was promoted to Chairman and Chief Executive Officer. Former Goldman employees head the New York Stock Exchange, the World Bank, the U.S. Treasury Department, the White House staff, and firms such as Citigroup and Merrill Lynch.

On September 21st, 2008, Goldman Sachs received Federal Reserve approval to transition from an investment bank to a bank holding company. [10]

On 22nd September 2008, The last two major investment banks in the United States, Morgan Stanley and Goldman Sachs, will become traditional bank holding companies, bringing an end to the era of investment banking on Wall Street. [11] The Federal Reserve's approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp. [12]

[edit] Corporate affairs

Goldman Sachs Tower in Jersey CityAs of 2006[update], Goldman Sachs employed 26,467 people worldwide. It reported earnings of US$9.34 billion and record earnings per share of $19.69.[13] It was reported that the average total compensation per employee in 2006 was US$622,000.[14] However, this number represents the arithmetic mean of total compensation and is highly skewed upwards as several hundred of the top earners command the majority of the Bonus Pools, leaving the median that most employees earn well below this number.[15] In Business Week's recent release of the Best Places to Launch a Career 2008, Goldman Sachs was ranked #4 out of 119 total companies on the list. [9] The current Chief Executive Officer is Lloyd C. Blankfein. The company ranks #1 in Annual Net Income when compared with 86 peers in the Investment Services sector. Blankfein earned a $67.9 million bonus in his first year. He chose to receive "some" cash unlike present United States Secretary of the Treasury Henry Paulson, his predecessor who chose to take his bonus entirely in company stock.[16]

Recently Goldman Sachs has been increasingly involved in both advising and brokering deals to privatize major highways by selling them off to foreign investors. In addition to advising Indiana on the Toll Road deal, Goldman Sachs has worked with Texas governor Rick Perry's administration on privatization projects, and according to John Schmidt, the former adviser to the Chicago mayor's office, it was a Goldman Sachs representative who first pitched the city on the idea of leasing out the Skyway. Goldman Sachs has played a major role in advising states on how to structure privatization deals—even while positioning itself to invest in the toll road market. Conflicts of interest in such transactions are difficult to quantify. [17]

[edit] Businesses
Goldman Sachs is divided into three core businesses.[citation needed]

[edit] Investment banking
Investment Banking is divided into two divisions and includes Financial Advisory (mergers and acquisitions, investitures, corporate defense activities, restructurings and spin-offs) and Underwriting (public offerings and private placements of equity, equity-related and debt instruments). Goldman Sachs is one of the leading investment banks, appearing in league tables. In mergers and acquisitions, it gained fame historically by advising clients on how to avoid hostile takeovers, moves generally viewed as unfriendly to shareholders of targeted companies. Goldman Sachs, for a long time during the 1980s, was the only major investment bank with a strict policy against helping to initiate a hostile takeover, which increased Goldman's reputation immensely among sitting management teams at the time. The investment banking segment accounts for around 17 percent of Goldman Sachs' revenues.[18]

[edit] Trading & Principal Investments
Trading and Principal Investments is the largest of the three core segments, and is the company's profit center.[citation needed] The segment is divided into three divisions and includes Fixed Income, Currency and Commodities (trading in interest rate and credit products, mortgage-backed securities and loans, currencies and commodities, structured and derivative products), Equities (trading in equities, equity-related products, equity derivatives, structured products and executing client trades in equities, options, and Futures contracts on world markets), and Principal Investments (merchant banking investments and funds). This segment consists of the revenues and profit gained from the Bank's trading activities, both on behalf of its clients (known as flow trading) and for its own account (known as proprietary trading).

Most trading done by Goldman is not speculative, but rather an attempt to profit from bid-ask spreads in the process of acting as a market maker. Around 68 percent of Goldman's revenues and profits are derived from this area.[19] Upon its IPO, Goldman predicted that this segment would not grow as fast as its Investment Banking division and would be responsible for a shrinking proportion of earnings. The opposite has been true however, resulting in Lloyd Blankfein's appointment to President and Chief Operating Officer after John Thain's departure to run the NYSE and John L. Thornton's departure for an academic position in China.

[edit] Asset management and securities services
Asset Management and Securities Services is a rapidly growing business for Goldman as it gains market share.[citation needed] It is separated into two divisions, and includes Asset Management, which provides large institutions and very wealthy individuals with investment advisory, financial planning services, and the management of mutual funds, as well as the so-called alternative investments (hedge funds, funds of funds, infrastructure funds, real estate funds, and private equity funds). The Securities Services division provides prime brokerage, financing services, and securities lending to mutual funds, hedge funds, pension funds, foundations, and High net worth individuals. This segment accounts for around 19 percent of Goldman's earnings.[citation needed] In 2006, the Goldman Sachs Asset Management hedge fund was the largest in the United States with $29.5 billion under management.[20] As of 2007[update], the fund was valued at $32.5 billion, the second-largest fund hedge fund after competitor JP Morgan's $33.1 billion fund.[21][22]

In August 2007, it emerged that Goldman had to spend $2 billion to rescue its own Global Equity Opportunities hedge fund from "significant market dislocation".[23]

[edit] GS Capital Partners
GS Capital Partners is the private equity arm of Goldman Sachs. It has invested over $17 billion in the 20 years from 1986 to 2006. One of the most prominent funds is the GS Capital Partners V fund, which comprises over $8.5 billion of equity.[24] On April 23, 2007, Goldman closed GS Capital Partners VI with $20 billion in committed capital, $11 billion from qualified institutional and high net worth clients and $9 billion from the firm and its employees. GS Capital Partners VI is the current primary investment vehicle for Goldman Sachs to make large, privately negotiated equity investments.[25]

[edit] Major Assets (GS Group)
Ayco L.P. (Financial Advisory)
Cogentrix Energy (Energy)
American Casino & Entertainment Properties (Casinos)
Coffeyville Resources LLC (Oil Refinery)
Myers Industries, Inc. (Plastic & Rubber)
USI Holdings Corporation (Insurance & Finance)
East Coast Power LLC (Energy)
Queens Moat Houses (Hotels)
Sequoia Credit Consolidation (Finance)
Shineway Group (Meat Processing)
Equity Inns, Inc. (Hotels)
KarstadtQuelle property group (Retailer)
Nursefinders Inc. (Healthcare)
Latin Force Group, LLC (Media)

[edit] Predictions
In December 2005, four years after its report on the emerging "BRIC" economies (Brazil, Russia, India, and China), Goldman Sachs named its "Next Eleven"[26] list of countries, using macroeconomic stability, political maturity, openness of trade and investment policies and quality of education as criteria: Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam.[27]

[edit] Corporate citizenship
Goldman Sachs has received favorable press coverage for conducting business and implementing internal policies related to reversing global climate change.[28] According to the company web site, the Goldman Sachs Foundation has given $94 million in grants since 1999, with the goal of promoting youth education worldwide.[29] The company also has been on Fortune Magazine's 100 Best Companies to Work For list since the list was launched in 1998.[30]

In November 2007, Goldman Sachs established a donor-advised fund called Goldman Sachs Gives that donates to charitable organizations around the world, while increasing their maximum employee donation match to $20,000.[31]

[edit] Charitable Services Group

[edit] Goldman Sachs Foundation

[edit] Notable alumni
Joshua Bolten - current White House Chief of Staff
Erin Burnett - CNBC Host
Jon Corzine - Governor of the State of New Jersey.
Michael Cohrs - Head of Global Banking at Deutsche Bank
Emanuel Derman - Author of My Life as a Quant and co-developer of the Black-Derman-Toy model.
Jim Cramer - founder of TheStreet.com, best selling author, and host of Mad Money on CNBC
Henry H. Fowler - 58th United States Secretary of the Treasury (1965-1969)
Edward Lampert- Hedge Fund Manager of ESL Investments. Brought K-Mart out of Bankruptcy in 2003.
Ashwin Navin - President and co-founder of BitTorrent, Inc.
Abby Joseph Cohen - Perma-bull market forecaster formerly of Drexel Burnham Lambert
Sacha Baron Cohen - Despite reports by several independent media sources that this well-known comedian is indeed a Goldman alumnus, there has been some controversy over the original source of these claims, with speculation that the supposedly independent sources had themselves used Wikipedia as their own source.[32] Goldman Sachs has never publicly denied having employed Cohen.
Ocado - 3 Founders of first UK online supermarket were all former Fixed Income Traders at Goldman Sachs London
George Herbert Walker IV - member of the Bush family and current managing director at Lehman Brothers
Robert Zoellick - United States Trade Representative (2001-2005), Deputy Secretary of State (2005-2006), World Bank President.
Mark Carney - Current Governor of the Bank of Canada [33][34]
Henry Paulson - Current United States Treasury Secretary.
Robert Rubin - Former United States Treasury Secretary, ex-Chairman of Citigroup.
Charlie Haas - Wrestler, who is working for World Wrestling Entertainment.
Malcolm Turnbull - Australian politician, currently the federal leader of the Liberal Party of Australia. Former managing director and later a partner of Goldman Sachs in Australia.
John Thain - Chairman and CEO, Merrill Lynch, and former chairman of the NYSE.
Robert Steel - Chairman and President, Wachovia.

[edit] Criticism and controversy
On August 28, 2007, a former Goldman Sachs associate accused of being the mastermind behind an insider trading scheme, one that pocketed $6.7 million, pleaded guilty in Federal District Court in Manhattan.

The FBI reported on July 6, 2007, that they were investigating letters sent to newspapers nationwide that said "Goldman Sachs. Hundreds will die. We are inside. You cannot stop us." The letters were post-marked in late June from Queens, New York and were handwritten in red ink on loose leaf paper, signed by "A.Q.U.S.A.".[35] A subsequent letter to New York Daily News claimed that the original threat was a hoax "conceived by three misguided teenagers", and pleaded for the investigation to be halted.[36]

In 2005, the firm advised both the New York Stock Exchange and Archipelago, which owns an electronic trading platform, in merger talks. Controversy surrounded the deal as John Thain, who at that time headed the New York Stock Exchange, was a former Goldman Sachs Executive.[37]

Also in 2005, Goldman Sachs received criticism from civic groups and New York City politicians when they received approximately $1.6 billion in taxpayer subsidies (mostly through Liberty Bonds) from New York City and state taxpayers to finance the Firm's new headquarters near the World Financial Center in Lower Manhattan in return for a commitment to keep at least 9000 employees and a major trading operation in Manhattan. It also comes with the expectation of the creation of at least 4000 new jobs by 2019.[38]

In 1986, David Brown was convicted of passing inside information to Ivan Boesky on a takeover deal.[39] Robert Freeman, who was a senior Partner, the Head of Risk Arbitrage, and a protégé of Robert Rubin, was also convicted of insider trading, with his own account and with the firm's.[40]

In 2006, as a result of an SEC investigation, Eugene Plotkin, a former research analyst in the Fixed Income division of Goldman Sachs, and David Pajcin, a former employee of Goldman Sachs, were prosecuted for insider trading. The prosecution began after regulators noticed unusually high trading volume before a merger announcement and discovered that a retired seamstress in Croatia, the aunt of Pajcin, had made more than $2 million. Plotkin and Pajcin traded in at least 25 stocks within one year based on inside information obtained through these schemes. Plotkin was sentenced to 57 months in prison and was also ordered to pay a $10,000 fine and to forfeit up to $6.7 million, the amount of the scam's illegal profits. Pajcin, who cooperated with the government, was sentenced to time served by a federal district court judge on January 18, 2008.[41][42][43]

[edit] Goldman in the mortgage market

[edit] Actions in the subprime mortgage crisis
Despite the 2007 subprime mortgage crisis, Goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by selling subprime mortgage-backed securities short. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with bearing responsibility for the firm's large profits during America's sub-prime mortgage crisis.[44] The pair, who are part of Goldman's structured products group in New York, made a profit of $4bn by "betting" on a collapse in the sub-prime market, and shorting mortgage-related securities. By summer of 2007, they persuaded colleagues to see their point of view and talked around skeptical risk management executives [45]. The firm initially avoided large subprime writedowns, and achieved a net profit due to significant losses on non-prime securitized loans being offset by gains on short mortgage positions.[46]

Goldman Sachs' newest acquisitions are to include the subprime portfolio of imploded mortgage company Popular Financial Holdings late in the third quarter of 2008. [47]

Detractors believe that Goldman wasn't quite as careful with its clients' money as it was with its own—its flagship Global Alpha hedge fund tumbled 37% in the global credit crunch.[45] As most individual investments of hedge funds are not made public, however, no one can know exactly what assets the firm traded during the period leading up to the credit crisis.

[edit] Goldman Sachs' Alternative Mortgage Products
This section may stray from the topic of the article.
Please help improve this section or discuss this issue on the talk page.

In 2006, Goldman Sachs' mortgage-bond division - Alternative Mortgage Products (known as GSAMP for short) - issued 83 home-loan-backed bonds, valued at $44.5 billion. In the subprime sector, it grew its business by 59% from 2005, offloading some $12.9 billion on to fund managers.

According to Inside Mortgage Finance, that made GSAMP the 15th biggest issuer of subprime-backed bonds in 2006. According to the website ABAlert.com (Asset-backed Alert), Goldman Sachs was one of the top 10 sellers of Collateralized Mortgage Obligations (CMO's) and may have sold about $100 billion in CMO's over the last two and a half years. [48]

But, by the start of the third quarter this year, those securities were being downgraded by the credit ratings agencies faster than any other subprime lender. According to a Reuters report, Citigroup's research (22nd June, 2007), stated "portions of Goldman's GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded a combined 69 times by Standard & Poor's and Moody's Investors Service in the year through June 15. Sixty of the GSAMP downgrades refer to classes from 2006 bonds," Citigroup added, and Allan Sloane in The Washington Post stated that one of Goldman's 2006 crop - the GSAMP Trust 2006- S3 - may actually be "the worst deal…floated by a top-tier firm." One in every six of the 8,274 mortgages bundled together in GSAMP Trust 2006-S3 was already in default 18 months later. Whoever bought the S3 bonds will have either taken a 100% loss, or are waiting to sell it on at a heavy discount. [49]

[edit] Change of Status
On September 21, 2008, Goldman Sach's CEO, announced Goldman Sachs was going to change of status from broker to "Bank holding" and hence be able to seek liquidities from the Federal Reserve Board in consideration for higher regulation concerning its activities. http://www2.goldmansachs.com/our-firm/press/press-releases/current/bank-holding-co.html

[edit] Works about Goldman Sachs

http://en.wikipedia.org/wiki/Henry_Paulson

Henry Paulson
From Wikipedia, the free encyclopedia
Jump to: navigation, search
Henry M. Paulson

--------------------------------------------------------------------------------

74th United States Secretary of the Treasury
Incumbent
Assumed office
July 3, 2006
President George W. Bush
Preceded by John W. Snow

--------------------------------------------------------------------------------

Born March 28, 1946 (1946-03-28) (age 62)
Palm Beach, Florida
Political party Republican
Alma mater Dartmouth College, Harvard University
Profession Investment banker
Religion Christian Science
Henry Merritt "Hank" Paulson Jr. (born March 28, 1946) is the United States Treasury Secretary and member of the International Monetary Fund Board of Governors. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs.

Contents [hide]
1 Early life and family
2 Career highlights
3 Civic activities
4 Treasury Secretary nomination
5 Acts as Treasury Secretary
5.1 Views Expressed by Paulson as Secretary of the Treasury
5.2 Leader of U.S. government economic bailout efforts of 2008
5.2.1 Conflict of interest
6 References
7 Further reading
8 External links

[edit] Early life and family
Born in Palm Beach, Florida, to Marianna Gallaeur and Henry Merritt Paulson, a wholesale jeweler,[1] he was raised in Barrington Hills, Illinois. He was raised as a Christian Scientist.[2] Paulson attained the rank of Eagle Scout in the Boy Scouts of America.[3][4]

A star athlete at Barrington High School, Paulson was a champion wrestler and stand out football player, graduating in 1964. Paulson received his Bachelor of Arts in English from Dartmouth College in 1968;[5] at Dartmouth he was a member of Phi Beta Kappa and was an All Ivy, All East, and honorable mention All American as an offensive lineman.

He met his wife Wendy during his senior year. The couple has two adult children, Henry Merritt III and Amanda Clark, and became grandparents in June 2007. They maintain homes in Washington, DC and Barrington Hills, Illinois.

In 1970 Paulson received a Master of Business Administration degree from Harvard Business School.[6]

[edit] Career highlights
Paulson was Staff Assistant to the Assistant Secretary of Defense at The Pentagon from 1970 to 1972.[7] He then worked for the administration of U.S. President Richard Nixon, serving as assistant to John Ehrlichman from 1972 to 1973.

He joined Goldman Sachs in 1974, working in the firm's Chicago office. He became a partner in 1982. From 1983 until 1988, Paulson led the Investment Banking group for the Midwest Region, and became managing partner of the Chicago office in 1988. From 1990 to November 1994, he was co-head of Investment Banking, then, Chief Operating Officer from December 1994 to June 1998;[8] eventually succeeding Jon Corzine (now Governor of New Jersey) as its chief executive. His compensation package, according to reports, was US$37 million in 2005, and US$16.4 million projected for 2006.[9] His net worth has been estimated at over US$700 million.[9] Paulson has personally built close relations with China during his career. In July 2008 it was reported by The Daily Telegraph that: "Treasury Secretary Hank Paulson has intimate relations with the Chinese elite, dating from his days at Goldman Sachs when he visited the country more than 70 times."[10]

[edit] Civic activities
Paulson has been described as an avid nature lover.[11] He has been a member of The Nature Conservancy for decades and was the organization's board chairman and co-chair of its Asia-Pacific Council.[7] In that capacity, Paulson worked with former President of the People's Republic of China Jiang Zemin to preserve the Tiger Leaping Gorge in Yunnan province.

Paulson is also on the Board of Directors of the Peregrine Fund; was the founding Chairman of the Advisory Board of the School of Economics and Management of Tsinghua University in Beijing; and, previously served as chairman of the influential trade group, the Financial Services Forum.

Notable among the members of Bush's cabinet, Paulson has said he is a strong believer in the effect of human activity on global warming and advocates immediate action to decrease this effect.[12]

As an environmental leader and philanthropist, Paulson while at Goldman Sachs, oversaw the corporate donation of 680,000 forested acres on the Chilean side of Tierra del Fuego, which led to criticisms from Goldman shareholder groups [13]. He further donated US$100 million of assets from his wealth to conservancy causes. He pledged his entire fortune for the same purpose at death. [14] He has also been considered someone who can influence world and business leaders to think beyond the bottom line. [15]

[edit] Treasury Secretary nomination

Paulson (right) with President George W. Bush as his nomination to become Treasury Secretary is announced.Paulson was nominated by U.S. President George W. Bush to succeed John Snow as the Treasury Secretary on May 30, 2006.[16] On June 28, 2006, he was confirmed by the United States Senate to serve in the position.[17] Paulson was officially sworn in at a ceremony held at the Treasury Department on the morning of July 10, 2006.

Paulson's three immediate predecessors as CEO of Goldman Sachs — Jon Corzine, Stephen Friedman, and Robert Rubin — each left the company to serve in government: Corzine as a U.S. Senator (later Governor of New Jersey), Friedman as chairman of the National Economic Council (later chairman of the President's Foreign Intelligence Advisory Board), and Rubin as both chairman of the NEC and later Treasury Secretary under President Bill Clinton.[18]

[edit] Acts as Treasury Secretary
Paulson has quickly distinguished himself from his two predecessors in the Bush administration by formally identifying the wide gap between the richest and poorest Americans as an issue on his list of the country's four major long-term economic issues to be addressed, highlighting the issue in one of his first public appearances as Secretary of Treasury.[19]

Paulson has conceded that chances were slim for agreeing on a method to reform Social Security financing, but said he would keep trying to find bipartisan support for it. [20]

He also helped to create the Hope Now Alliance to help struggling homeowners during the subprime mortgage financial crisis.[21]

[edit] Views Expressed by Paulson as Secretary of the Treasury
In Spring 2007, Secretaty Paulson told an audience at the Shanghai Futures Exchange that "An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention." [22]

In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades. [23]

On July 20, 2008, after the failure of Indymac Bank, Paulson reassured the public by saying, “it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” [24]

On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie Mac.[25] On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship.[26]

[edit] Leader of U.S. government economic bailout efforts of 2008
Paulson was the designated leader of the Bush administration's efforts in 2008 to federalize the cost of bad loans made by financial institutions.

Through unprecedented intervention by the U.S. Treasury, Paulson led government efforts to avoid a severe economic slowdown. He pushed through the conservatorship of government agency mortgage giants Fannie Mae and Freddie Mac. Working with Federal Reserve Chairman Ben Bernanke, he influenced the decision to create a credit facility (bridge loan & warrants) of US$85 billion to American International Group so it would avoid filing bankruptcy.

In late September of 2008, Paulson, along with Ben Bernanke and Christopher Cox, led the effort to help financial firms by agreeing to use US$700 billion dollars to purchase bad debt they had incurred.[27] Discussing his decision to take action, Paulson said: “It just happened dramatically. There was only one way that we could reassure the markets and deal with a very significant and broad-based freezing of the credit market. There was no political calculus. It was overwhelmingly obvious.”[28]

On September 19, 2008, Paulson called for the U.S. government to spend hundreds of billions of dollars more to rescue financial firms from nonperforming mortgages that threaten the stability of those firms.[29] Due to his leadership and public appearances on this issue, the press labeled these measures the "Paulson financial rescue plan" or simply the Paulson Plan.[30]

[edit] Conflict of interest
There has been some criticism of Paulson, with suggestions that Paulson's plan may potentially have some conflicts of interest. This is because Paulson is the former CEO of Goldman Sachs, a firm that may benefit from the plan. [31][32] Unlike the previous bailouts and managed liquidations of Goldman competitors Bear Stearns, Merrill Lynch and Lehman Bros. and those of AIG, Freddie Mac and Fannie Mae, in which shareholder value was largely wiped out, Goldman's stock would likely rise under the Paulson plan, benefiting his former partners, because it would take distressed assets off their balance sheet. [33]

The proposed bill would give him unprecedented powers over the economic and financial life of the U.S.. Section 8 of Paulson’s plan states: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”[34]

[edit] References