Archive for the ‘Goldman Sachs’ Category

‘Break Up The Banks’ is Latest Chart-Topper

Thursday, February 7th, 2013

This post by Roy Oppeneim was originally published in Yahoo! Homes and is being redistributed on South Florida Law Blog with their permission.

Bruce SpringsteenMy friends, the drumbeat is growing louder and louder. Each and every day another voice is joining the chorus.

Soon, I hope, it will be impossible for even the most devout pro-Wall Street politician to ignore.

It’s time to end Too Big To Fail, and there’s only one way to do that. Get out the hammer and break up the banks. Make them manageable and accountable, and remove the stranglehold they have on our economy, our politicians, and our government.

I’ve been banging away at my little cymbal, telling anyone who would listen that breaking up the banks is the path regulators ought to be taking. But I’m not exactly one to carry a tune, so not much has changed.

Bruce Springsteen (aka The Boss), who has always had the pulse of the working man, has championed a return to community banking. Even that didn’t have much impact on the national conversation.

Thankfully more and more rational voices are joining Springsteen’s “band.” The latest is author Michael Lewis. While reviewing former Goldman Sachs executive Greg Smith’s new book, Lewis comes to this conclusion: “The financial sector is already so gummed up by government subsidies that market forces no longer operate within it… Along with the other too-big-to-fail firms, Goldman needs to be busted up into smaller pieces.”

Michael and I must have been drinking from the same fountain in Econ 101 in college. (I sat behind him throwing the occasional spitball.)
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Posted in Big Banks, Goldman Sachs, Too Big To Fail | 4 Comments »

Moral Hazard Lies On Wall Street, Not Main Street

Thursday, August 30th, 2012

Judge About To Make VerdictIf there is only one thing that I hope to see as an attorney, it is the law applied fairly to all sides of the courtroom.

And there has been no greater sense of frustration for me than to see the banks, time and time again, not be held to the same standards as you or me.

It has become standard practice for banks to wiggle and maneuver and do everything possible to escape accountability.

But perhaps even more maddening is when those in power refuse to dig their heels and go after these banks. The latest example: the Justice Department’s refusal to prosecute Goldman Sachs.

They hedged their bets and sought to make money on the backs of their clients. This is nothing new to any of my readers, nor is the Justice Department’s lack of reprisal.

Both Matt Taibbi, Rolling Stone’s excellent political reporter, and the New York Times Opinion Page called Eric Holder on the carpet, and now it is my turn.

No one is suggesting that prosecuting Goldman Sachs would have been a walk in the park. But prosecuting them was necessary, if the climate of Wall Street is ever going to change.

What is absolutely maddening about all this is that by allowing Goldman Sachs to skate, the DOJ is all but announcing that the banks can continue to engage in other unconscionable and illegal activities without the fear of retribution This is called a moral hazard — encouraging certain negative behavior by allowing it to continue.

“Ironically” — we only hear about moral hazard in the media, it’s FROM the banks, or government officials like Edward DeMarco, who are alarmed at the notion that homeowners might participate in moral hazard. They will use that alarmist notion, despite the fact that it has yet to be substantiated, as a reason not to do principal write-downs or provide homeowners the meaningful assistance they need.
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Posted in Department of Justice, Goldman Sachs, Matt Taibibi, Wall Street | No Comments »

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