Holder Admits: "Too Big To Fail, To Big To Jail"

[orangeblueorangeblue]

Originally Posted by Row6

Putting aside your false claim of substantive equivalency between our posting on this thread, "taking advantage of someone" was the key description in that quote

Again, this could apply to literally any business practice. The very nature of business is to sell something at maximum attainable value.

[orangeblueorangeblue]

Originally Posted by Row6

PS There is no evidence that Goldman was "dumping" something they were stuck with - as if that would justify it. That is your characterization, based on what exactly?

"Dumping," here, is a shorthand for the categorization of unloading assets that the organization predicts to lose value and thus sells as a mitigation of the inherent risk of investment trade. Or, for your purposes, "fraud." Like when someone sells a stock they expect to lose value. Or a dude sells his Honus Wagner card. Or like 99.9995% of business.

[orangeblueorangeblue]

"It's fraud!"

"How?"

"You're not contributing!"

"What?"

"Look, there's ambiguity in the law. It's fraud!"

"How?"

The how has, to date, not been answered.

[Matthanuf06]

Originally Posted by Row6

Very enlightening as to what your opinion is, but not as to why. I posted an intelligent discussion of what constitutes fraud in federal courts which supports my position, while you have ..... posted your opinion for about the 10th time with no accompanying explanation or supporting authority.

You've posted a few cases. Prosecute those. However, that does absolutely nothing in terms of mitigating another crisis. Do you really think if you took away the handful of real fraudulent cases that securitization wouldn't exist?

[Row6]

Originally Posted by orangeblueorangeblue

Again, this could apply to literally any business practice. The very nature of business is to sell something at maximum attainable value.

As long as you don't misrepresent your product you can't be accused of fraud for charging a higher price than everyone else. If you do misrepresent what you know about a product to someone - especially, but not necessarily only if they hold you in a position of trust - you certainly can be and it will be up to a judge or jury to decide.

I hope you are able to follow this fairly simple distinction between normal business practices and fraud.

[Row6]

Originally Posted by Matthanuf06

You've posted a few cases. Prosecute those. However, that does absolutely nothing in terms of mitigating another crisis. Do you really think if you took away the handful of real fraudulent cases that securitization wouldn't exist?

No, and not my point. I agree that much of what happened to cause the crash under existing law was probably not illegal in any way. OTH, prosecuting the worst cases might have caused other cards to fall and would have put a little fear of the SEC or DOJ in the hearts of these otherwise out of control operators. For the future I think stricter regulations and a larger SEC staff would help.

[Row6]

Originally Posted by orangeblueorangeblue

"Dumping," here, is a shorthand for the categorization of unloading assets that the organization predicts to lose value and thus sells as a mitigation of the inherent risk of investment trade. Or, for your purposes, "fraud." Like when someone sells a stock they expect to lose value. Or a dude sells his Honus Wagner card. Or like 99.9995% of business.

You are assuming that Goldman bought these bonds and then had to dump them. I don't think that is what they were doing. They were brokers making a commission by trading on the trust of their clients. They were also planning on making money by betting against these same bonds with their own money.

[orangeblueorangeblue]

Originally Posted by Row6

As long as you don't misrepresent your product you can't be accused of fraud for charging a higher price than everyone else. If you do misrepresent what you know about a product to someone - especially, but not necessarily only if they hold you in a position of trust - you certainly can be and it will be up to a judge or jury to decide.

I hope you are able to follow this fairly simple distinction between normal business practices and fraud.

And again, it isn't the bankers that did misrepresentation. These are sales of investment bundlings with inherent, known risk.

[Row6]

Originally Posted by orangeblueorangeblue

And again, it isn't the bankers that did misrepresentation. These are sales of investment bundlings with inherent, known risk.

No, these were sales by an investment house who advertises their expertise and trustworthiness in helping clients invest and they purposefully hid the risk they knew and on which they were betting their own money. That's fraud, and possibly criminal.

[108]

obob, do you believe or not believe that there was willful misrepresentation of the volatility and inherent risk involved with the level of subprime securities bundled in to investors?

[Matthanuf06]

Originally Posted by 108

obob, do you believe or not believe that there was willful misrepresentation of the volatility and inherent risk involved with the level of subprime securities bundled in to investors?

Not on any systematic level.

[108]

Originally Posted by Matthanuf06

Not on any systematic level.

what levels specifically?

[Matthanuf06]

Originally Posted by Row6

No, these were sales by an investment house who advertises their expertise and trustworthiness in helping clients invest and they purposefully hid the risk they knew and on which they were betting their own money. That's fraud, and possibly criminal.

A client and an portfolio manager/analyst are allowed to different opinions. If a client wants the exposure and the bank wants to shed it, what's the problem?

[Matthanuf06]

Also do you realize you can go to a bank, provided you have enough $$$, and tell them to securitize you something. They can customize it based on cash flow characteristics (say you need xx dollars every month starting in 3 years), duration, certain type of risk exposure, etc. That doesn't mean they have to like it as an investment. What's good for one person isn't always good for another.

[Matthanuf06]

Originally Posted by 108

what levels specifically?

I'm sure there are some individuals who committed misconduct. No different than any other profession in the world.

[Row6]

Originally Posted by Matthanuf06

A client and an portfolio manager/analyst are allowed to different opinions. If a client wants the exposure and the bank wants to shed it, what's the problem?

In the examples I have been talking about the investment managers were actively selling bonds they knew were BS, as in "hey, here's something you should buy". Clients weren't twisting their arm.

[Row6]

Originally Posted by Matthanuf06

I'm sure there are some individuals who committed misconduct. No different than any other profession in the world.

Correct. Why haven't there been any criminal prosecutions? I DK the answer but I'm asking.

[108]

Originally Posted by Matthanuf06

I'm sure there are some individuals who committed misconduct. No different than any other profession in the world.

so just a few individuals conducted misconduct, and the rest were just completely unaware of the crap they were selling, whether on the front end or back end

[Matthanuf06]

Originally Posted by 108

so just a few individuals conducted misconduct, and the rest were just completely unaware of the crap they were selling, whether on the front end or back end

What do you mean crap? I really don't think you understand how it works.

[Matthanuf06]

Originally Posted by Row6

In the examples I have been talking about the investment managers were actively selling bonds they knew were BS, as in "hey, here's something you should buy". Clients weren't twisting their arm.

So? They shouldn't sell their inventory?