Today's Goldman Grilling

[MNeagle]

Submitted by Tyler Durden on 04/27/2010 07:23 -0500

Claire McCaskillGoldman SachsJohn McCainTestimony


For those wishing to watch the full 10:00am Goldman hearing live and commercial free we suggest the following C-Span link. The witness panel for today's hearing is presented. We will update this post with all Goldman-relevant news as the day progresses.

Those asking questions will be: Carl Levin Chairman (D-MI), Thomas R. Carper (D-DE), Mark L. Pryor (D-AR), Claire McCaskill (D-MO), Jon Tester (D-MT), Tom Coburn Ranking Member (R-OK), Susan M. Collins (R-ME), John McCain (R-AZ), John Ensign (R-NV).

Panel 1
•DANIEL L. SPARKS (Prepared testimony)
Former Partner, Head of Mortgages Department
The Goldman Sachs Group, Inc.

•JOSHUA S. BIRNBAUM (Prepared testimony)
Former Managing Director, Structured Products Group Trading
The Goldman Sachs Group, Inc.

•MICHAEL J. SWENSON (Prepared testimony)
Managing Director, Structured Products Group Trading
The Goldman Sachs Group, Inc.

•FABRICE P. TOURRE (Prepared testimony)
Executive Director, Structured Products Group Trading
The Goldman Sachs Group, Inc.

Panel 2
•DAVID A. VINIAR (Prepared testimony)
Executive Vice President and Chief Financial Officer
The Goldman Sachs Group, Inc.

•CRAIG W. BRODERICK (Prepared testimony)
Chief Risk Officer
The Goldman Sachs Group, Inc.

Panel 3
•LLOYD C. BLANKFEIN (Full Zero Hedge annotated testimony)
Chairman and Chief Executive Officer
The Goldman Sachs Group, Inc



GS Tourre.pdf 13.34 KB
GS Sparks.pdf 72.67 KB
GS Birnbaum.pdf 11.4 KB
GS Swenson.pdf 11.6 KB
GS Viniar.pdf 76.73 KB
GS Broderick.pdf 69.58 KB


http://www.zerohedge.com/article/todays-goldman-grilling?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedg e+-+on+a+long+enough+timeline%2C+the+survival+rate+fo r+everyone+drops+to+zero%29

[oldmansmith]

I still think that this is one big smoke screen, but we'll see. One can only hope.

[MNeagle]

Goldman Sachs’s Tourre to ‘Categorically’ Deny SEC’s Claims

April 27 (Bloomberg) -- Fabrice Tourre, the Goldman Sachs Group Inc. executive director sued by the Securities and Exchange Commission for fraud, will tell a Senate subcommittee that he will defend himself in court against the suit.

“I deny -- categorically -- the SEC’s allegation,” Tourre, 31, will say today at a hearing of the Permanent Subcommittee on Investigations, according to a prepared text of his remarks released by Goldman Sachs. “I will defend myself in court against this false claim,” he said, adding that a deal at the center of the suit “was not designed to fail.”

Tourre and six other current and former Goldman Sachs employees are testifying today about the firm’s mortgage- securities business in the years leading up to the biggest financial crisis since the Great Depression. Goldman Sachs, the most profitable securities firm in Wall Street history, contests the SEC’s suit, saying it provided investors with all of the information they needed.

The SEC said that in early 2007, as the U.S. housing market teetered, Goldman Sachs created and sold a CDO linked to subprime mortgages without disclosing to investors ACA Management LLC and IKB Deutsche Industriebank AG that hedge fund Paulson & Co. helped pick the underlying securities and bet against the vehicle, known as Abacus 2007-AC1.

In its complaint, the SEC has alleged that Tourre misled ACA into thinking that Paulson planned to invest in the equity, or riskiest piece, of the deal instead of betting against it by buying credit protection.

‘Most Important Clients’

“I never told ACA, the portfolio selection agent, that Paulson & Co. would be an equity investor in the AC-1 transaction or would take any long position in the deal,” Tourre will say today, according to the prepared remarks. “Although I don’t recall the exact words that I used, I recall informing ACA that Paulson’s fund was expected to buy credit protection on some of the senior tranches of the AC-1 transaction.”

Tourre will also tell the panel that ACA and IKB were “institutions with significant resources and experience in the CDO market” and that they “were two of the most important clients of my desk,” according to the prepared remarks. “Goldman Sachs had no economic motive to design the AC-1 transaction to fail,” he will say.

‘Unfounded Attacks’

“I have been the target of unfounded attacks on my character and motives,” Tourre will say, according to the prepared text. “I appreciate the opportunity to appear before the subcommittee to answer these false charges.”

Tourre was placed on paid leave by Goldman Sachs after the Securities and Exchange Commission filed its suit on April 16. Joining him on the first panel of witnesses starting at 10 a.m. this morning are Michael Swenson, a managing director in the structured products group, Joshua Birnbaum, a former managing director in the same group, and Daniel Sparks, a former partner who ran the mortgage department.

Later today, the panel will hear from David Viniar, the firm’s chief financial officer, and Craig Broderick, the chief risk officer. Chairman and Chief Executive Lloyd Blankfein, 55, will be the final witness at the end of the day.

Goldman Sachs made an estimated $3.7 billion in 2007 by placing “heavy bets” against mortgage-linked securities, including some it created, Carl Levin, a Michigan Democrat who leads the investigations panel, said yesterday. Levin released e-mails and other documents that he said show “Goldman repeatedly put its own interest and profit ahead of the interests of its clients.”

‘About to Collapse’

“We didn’t have a massive short against the housing market and we certainly did not bet against our clients,” Blankfein will tell the subcommittee, according to a prepared text of his remarks.

Tourre “believes that he indicated” to investors that Paulson was interested in taking a “short” position on the deal, meaning he was betting against it, Greg Palm, Goldman Sachs’s co-general counsel, said last week.

“The whole building is about to collapse anytime now,” Tourre wrote to a friend in a January 2007 e-mail, according to the SEC complaint. “Only potential survivor, the fabulous Fab... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!”

In a March 7, 2007, e-mail released by the firm, Tourre described the U.S. subprime mortgage market as “not too brilliant” and said that “according to Sparks,” an apparent reference to Daniel Sparks who ran Goldman Sachs’s mortgage business at the time, “that business is totally dead, and the poor little subprime borrowers will not last too long!!!”

http://www.bloomberg.com/apps/news?pid=20601087&sid=avZm.7dhkSA8&pos=1

[Shami-Amourae]

http://www.c-span.org/Watch/C-SPAN3.aspx

Watch it live!

[General of Darkness]

http://www.c-span.org/Watch/C-SPAN3.aspx

Watch it live!


Cool thanks. BTW - I'll be surprised if ANYTHING happens from this.

[General of Darkness]

LMAO, khazar Levin just said SHITTY on national TV. "Boy that Timberwolf was a SHITTY DEAL" He said shitty about 10 times so far.

[Shami-Amourae]

These guys are really good at saying a lot of nothing. Wow.