Lloyd Blankfein's Response Was ‘Troublesome’

[CrackSmokeRepublican]

Blankfein needs a Boot of JACKBOOT Justice jamming his head onto a freshly painted Wallstreet curb. That is the only response to "troublesome" that these dumbass  JEW BANKRUPTSERS and SCAMMERS understand properly.   -- THE CSR  :x

-------
Blankfein Response Was 'Troublesome,' Angelides Says (Update1)

By Ian Katz, Christine Harper, and Joshua Gallu

Jan. 13 (Bloomberg) -- Lloyd Blankfein, the head of Goldman Sachs Group Inc., failed to own up to his firm's role in selling mortgage securities that helped trigger the global credit crisis, said the chairman of the panel investigating the financial meltdown.

"Mr. Blankfein himself never admitted that there was any responsibility of Goldman Sachs to make sure the products themselves were good products," Philip Angelides, chairman of the Financial Crisis Inquiry Commission, told reporters after a hearing in Washington today. "That's very troublesome."

Blankfein, the New York-based firm's chairman and chief executive officer, found himself targeted for questioning as the panel opened two days of hearings on the causes of a collapse that led to a $700 billion U.S. government bailout of the nation's banks. Brian Moynihan, John Mack and Jamie Dimon, who oversee Bank of America Corp., Morgan Stanley and JPMorgan Chase & Co., also appeared today.

Blankfein, 55, said in response to questions from the panel that Goldman Sachs sold securities to the "most sophisticated investors who sought that exposure." While the firm has a duty to disclose risks to investors, Goldman Sachs couldn't predict how the securities would perform, he said.

"We did not know at any minute what would happen next," Blankfein said. "There were people in the market who thought it was going down and there were others who thought these prices had gone down so much they were going to bounce up again."

Near-Record Bonus Pool

Goldman Sachs is in the spotlight because the firm has posted record profits and set aside a near-record $16.7 billion to pay employees, less than a year after receiving government support during the worst financial crisis since the Great Depression.

"I don't think the head of Goldman Sachs will ever be a sympathetic character with the public," James Gattuso, senior fellow in regulatory policy at the Heritage Foundation, told Bloomberg Television. "He did about as well as could be expected, especially considering the proportion of time spent on grilling him in particular."

Angelides, the former California state treasurer, pressed Blankfein on Goldman Sachs's sale of mortgage-backed securities and its requests to the credit-rating companies for the highest rating while at the same time betting the securities would later fail.

"It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars," Angelides told Blankfein. "It doesn't seem to me that that's a practice that inspires confidence in the markets."

SEC Probe

The Securities and Exchange Commission and brokerage regulators are examining how Wall Street firms bet against mortgage-linked securities to profit as their clients took losses, people familiar with the matter said in late December.

"Lloyd drew almost all of the fire" from the commission, said Rob Johnson, director of the Roosevelt Institute Financial Reform Initiative and a former chief economist for the Senate Banking Committee. "The idea that Lloyd is doing something bad that others aren't doing is a bit of a distortion. I was surprised, in the realm of fairness, that Angelides's questioners didn't turn the same question on to others."

AIG Bailout

Blankfein also testified today that he was never asked by U.S. regulators to accept a discount on investment contracts his firm had with American International Group Inc. AIG, as part of a bailout orchestrated by the Federal Reserve Bank of New York, paid 100 cents on the dollar on credit-default swaps purchased by bank counterparties including Goldman Sachs.

The New York Fed said it had to make the payments after banks refused to accept so-called haircuts, according to a November audit from Neil Barofsky, the special inspector of the U.S. Troubled Asset Relief Program.

"I never got a request myself about taking less; it didn't come up in any conversation I can recall," Blankfein said. While an employee said he had received a question on the topic, it "never came up to me," he said.

If that was the case, the Federal Reserve and Treasury may "have some explaining to do," Johnson said. "The mishandling of that bailout strongly suggests that financial reform will not be complete if we just give discretion to the Fed and the Treasury secretary to go do it again."

The commission is led by Democrat Angelides and Bill Thomas, a Republican who is a former congressman from California. The CEOs led hearings that include Federal Deposit Insurance Corp. Chairman Sheila Bair, SEC Chairman Mary Schapiro and attorneys general from Colorado and Illinois. The panel has six members appointed by Democrats and four by Republicans and has the power to subpoena witnesses and documents.

To contact the reporters on this story: Christine Harper in New York at jgallu@bloomberg.net; Ian Katz in Washington at http://www.bloomberg.com/apps/news?pid= ... MT64jPRykQ