A Slap on the Wrist for Goldman Sachs

By: Abid Ali

Source: Al Jazeera
http://blogs.aljazeera.net/business/2010/07/16/slap-wrist-goldman-sachs

It may have been a record fine for a financial institution but it appears investment bank Goldman Sachs got off lightly. The whole affair brings in to question the strength of the Securities and Exchange Commission’s case.

The “great vampire squid wrapped around the face of humanity” agreed to pay $550 million to settle fraud charges. But crucially it did not admit guilt for misleading clients over subprime mortgage products.

Even the SEC appears to have decided no fraud was committed and accepts the Goldman made a “mistake” in its marketing material. It has failed to hold Goldman’s feet to the fire, even if no one can question the size of the fine.

What is $550 million to Goldman Sachs? Well, two weeks earnings or the total compensation for about 1000 of its 32,000 employees.

“They pay $550 million and they get an $800 million pop in their share price,” Kevin Caron, market strategist at Stifel, Nicolaus & Co. told Reuters.

“The implication of the math is that the market had discounted a more harsh treatment and relative to what the market was looking for they got a pass - they got of easy.”

So the market was expecting worse - by the end of Thursday Goldman’s market value had soared $6.6 billion.

The victims of this “mistake” do get compensated.

Germany’s IKB and the Royal Bank of Scotland get $150 million and $100 million respectively.

Others will be forming a orderly queue, but Goldman and its Wall Street brethren will be heaving a sigh of relief that the penalty won’t be larger.

US housing foreclosures at 'record high'

US foreclosure rate will hit a record one million by the end of 2010


Source: Press TV
http://www.presstv.ir/detail.aspx?id=134979§ionid=3510203


More Americans will lose their homes by the end of this year than at any other time, with the foreclosure rate hitting a record high of 1 million.

In a new all-time high, nearly one million houses are expected to go into foreclosure in the United States by the end of 2010. According to RealtyTrac, the record is ten times as many that go into foreclosure in normal economic circumstances.

RealtyTrac also reports that while month-over-month and year-over-year foreclosure filings are decreasing, the nation is heading to a record 3.2 million this year including default notices, auction sales and bank repossessions.

Last year, lenders foreclosed on more than 900,000 homes while the historic average is 100,000 annually, CBS news reported.

Economy expert Rollin Amore says part of this year's sky-high foreclosure rate is due to delay, as some banks have postponed foreclosures in hope of help to originate from the White House.

Some experts say that delayed foreclosures have created a glut in the housing market; there are too many houses for sale and not enough buyers.

The real-estate market makes up an estimated 10 percent of the US economy.