US Republicans block debate of finance rules reform

[4me2]

US Republicans block debate of finance rules reform





Wall Street has fiercely resisted President Obama's bank reforms

US Republican senators have blocked moves to start debating a bill to introduce the most significant reforms to financial regulations for 60 years.

Needing 60 votes in the 100-seat Senate to begin debating the bill, Democratic leaders fell three votes short.
Democratic Senator Ben Nelson joined 39 Republicans in voting against it.
Republicans say the bill does not go far enough in its reforms, while Democrats say their opponents want to protect wealthy corporate interests.
Both parties say they expect the overhaul will eventually be approved.
Correspondents say that with Wall Street reeling from a fraud case against Goldman Sachs they are eager to act before November's Congressional elections.
Goldman executives are due to appear before a Senate committee later. On Monday, the committee said the bank had made billions of dollars at its clients' expense during the housing market collapse.
'Obstruction'
Minutes after Monday's procedural vote, President Barack Obama said he was "deeply disappointed" that Republicans had rejected a debate and urged senators to put the interests of country ahead of party.
MARDELL'S AMERICA

Win or lose, in the short term at least, Democrats win


Mark Mardell
BBC North America editor



Read Mark's thoughts in full

"Some of these senators may believe that this obstruction is a good political strategy, and others may see delay as an opportunity to take this debate behind closed doors, where financial industry lobbyists can water down reform or kill it altogether," he said.
"But the American people can't afford that."
It is likely that the Democrats will try again later this week to push through a debate. Senate Majority Leader Harry Reid switched his vote to "no" at the end - a manoeuvre that will enable him to call for a new vote as early as Tuesday.
"The only thing Republicans stand for is standing together," he said.
The Democratic dissenter, Sen Nelson, said his vote reflected concerns about the bill from businessmen in his home state.
Nebraska-based billionaire Warren Buffett has reportedly been lobbying to exempt existing derivatives from new regulations.
Analysts say that with neither side appearing to be willing to compromise over the shape of the bill, further delays look likely.
All of us want to deliver a reform that will tighten the screws on Wall Street, but we're not going to be rushed


Mitch McConnell
Republican Senate leader

Last-minute talks had already taken place to try to reach a compromise before the vote.
But Senate Minority leader Mitch McConnell had urged his side to stand firm.
"All of us want to deliver a reform that will tighten the screws on Wall Street. But we're not going to be rushed on another massive bill based on the assurances of our friends on the other side," he said.
Democrats and their two independent allies control 59 Senate seats, but had needed at least one Republican vote to overcome delaying tactics.
The bill's supporters say it would tackle financial institutions that are "too big to fail", putting in place a framework that would mean taxpayers do not fund any future bailouts.
Among the bill's proposals are changes to the derivatives market and tougher legislation to protect consumers.
Mr Obama has made reining in Wall Street a cornerstone of his presidency.
In a speech last week to the financial community, he attacked the army of lobbyists in Washington employed by banks to oppose his changes.
A poll published in the Washington Post on Monday suggests two-thirds of Americans support stricter financial regulations.



http://news.bbc.co.uk/1/hi/business/8644952.stm

[4me2]

These fucker (republicans) were responsible for the credit crunch under Bush, and now they are blocking reforms.

They need stringing up.

[blaggard]

Fuckers is about right, the Goldman Sachs fraud had them reccomending investments while they and their mates bet against them, they should rot in solitary confinement for the rest of their days!
-----------------------------------------------------------------------------------------------

Goldman Sachs charged with $1bn fraud over toxic sub-prime securities

Securities and exchange commission charges Goldman Sachs with conflict of interest in sub-prime mortgage asset sales

The new Goldman Sachs Group Inc. headquarters at 200 West Street, in New York's lower Manhattan. Photograph: Brendan McDermid/REUTERS

The Wall Street bank Goldman Sachs, long considered a shrewd winner from the financial crisis, was slapped with potentially devastating fraud charges todayas US regulators accused the firm of fiddling investors out of more than $1bn (£640m) by wilfully mis-marketing toxic sub-prime mortgage-related securities.
A 22-page lawsuit filed by the US securities and exchange commission (SEC) charged Goldman Sachs with working with a controversial US hedge fund, Paulson & Co, to structure and sell a complex package of mortgages to clients while Paulson took a "short" position betting that the very same mortgages would fail.
Within minutes of the charges emerging, Goldman's shares plunged by 13% as investors feared a shattering blow to the investment bank's credibility. The SEC's accusations are levelled against the firm as a whole and against a French employee, Fabrice Tourre, 31, who is now an executive director in Goldman's London office.
The allegations revolve around a collateralised debt obligation called Abacus 2007-AC1 that was created by Goldman three years ago and proved a spectacularly poor investment for clients. Within nine months, 99% of the mortgages in the package had been downgraded and investors lost more than $1bn. Paulson, in contrast, made a profit of about the same amount.
Robert Khuzami, director of the SEC's enforcement division, said: "The product was new and complex but the deception and conflicts are old and simple. Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio."
Goldman swiftly denied any wrongdoing, saying: "The SEC's charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation."
The bank was among the few Wall Street firms to avoid significant losses on mortgages during the credit crunch. But the bank has been dogged by accusations of betting against clients and its insistence on paying industry-topping bonuses to its staff has turned it into a lightening rod for public outrage over perceived greed.
Tourre, the Frenchman allegedly at the centre of the scandal, was educated at the elite École Centrale Paris and at California's Stanford University. In 2007, he was a vice-president at Goldman's head office in New York, where he co-ordinated the creation of the contentious product.
In a January 2007 email sent by Tourre to a friend shortly before creating Abacus, he wrote: "More and more leverage in the system, the whole building is about to collapse anytime now ... only potential survivor the fabulous Fab[rice Tourre] ... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding the implications of all these monstruosities [sic]!!!" Losers in the deal include a Dusseldorf-based bank, IKB, which lost $150m, and the Dutch firm ABN Amro, later bought by Royal Bank of Scotland, which acted as an unwitting conduit between the parties involved.
The SEC alleges Goldman stuffed the Abacus portfolio with homeloans written in states such as Arizona, California, Florida and Nevada that suffered the worst of the US housing crash. Goldman told clients that an independent firm, ACA Management, was selecting the contents. In a 178-page memo to clients, it made no mention of Paulson, which, in fact, was heavily involved in selecting the mortgages. Goldman was paid $15m by Paulson for structuring and marketing Abacus.
The involvement of Paulson & Co is significant. The fund's billionaire boss, John Paulson, became a Wall Street celebrity by earning nearly $4bn in 2008 by correctly predicting that the US mortgage market would collapse. Among his lucrative "short" positions were bets that UK banks including Lloyds, Royal Bank of Scotland and HBOS would run into trouble.
For Goldman, the SEC charges are a huge headache. The bank's chief executive, Lloyd Blankfein, has spent months trying to soothe public anger over Goldman's conduct. He apologised in November for the firm's involvement in "things that were clearly wrong", although he attracted derision by remarking, in an apparent joke, that the bank was doing "God's work".

http://www.guardian.co.uk/business/2...-fraud-charges