Chillin' out till it needs to be funded
Read this at seekingalpha (anonymous) ..
Goldman Sachs (GS) and Deutsche Bank (DB) got served by the US Senate which is investigating fraud in the mortgage meltdown last year. Several other financial institutions may also have received subpoenas from the sub-committee that is headed by Senator Carl Levin.
WSJ said the focus of the investigation is on whether internal communications show executives at the banks had private doubts on the soundness of the mortgage-related securities they were putting together.
While $GS and $DB have kept their wits about them throughout the crisis, they have been party to writing mortgage backed securities without due Verification and even dealt in resold paper as collateral on ‘freshly packaged’ stuff. seekingalpha also doubts if these may be paper sold by institutional side after the issuer side already sold them (short). This is where the niggly details of the crash are, and if these can be found, none of the other reforms might matter to those in trading houses and hedge funds that used these trades to catch up on their losses and ‘post Madoff,
Retail mortgages in fact come with a hefty price tag in terms f operational compliance shortcomings being as high as 40% from Basel data. Here’s hoping we catch the right crooks..