If Teachers Were Like Goldman Sachs Traders...

Thanks Uncle Mikey and Auntie Carmen - a $1,000 bucks (which is actually more like $863 after taxes and union dues)*:

Dear Colleagues,

As you come to the end of this school year we both wanted to take this opportunity to thank you for all your hard work and dedication. We both know from experience how difficult the work you do is, and we take great pride in the thousands of people in New York City Public Schools who work hard each and every day to try to fulfill the dreams and hopes of over one million students. We want you to know you have our respect and our thanks.

We wanted to do more than tell you we appreciate your hard work - we wanted to take action to show you. So we have taken the first step in implementing the financial component of the recent collective bargaining agreement between the United Federation of Teachers and the New York City Department of Education which provides for a one time ratification bonus of $1,000 (pro-rated for part-time employees) to be issued to any member who was on payroll as of the date of ratification, June 3, 2014. We are pleased to inform you that pending the ratification by the Panel for Educational Priorities on June 24th, for most school-based UFT staff this payment is going to appear in either your direct deposit account on June 25th, or in a check delivery scheduled for June 26th. Other UFT staff such as nurses and therapists should receive this payment on July 3, and part time F status staff should be receiving their pro-rated portion on July 10.

We hope you enjoy the summer and return refreshed and ready for the next school year. We have much to work on together, including efforts around enhanced professional development and dedicated time for parent engagement, and we look forward to working together on these and many other initiatives next year. Thank you for your work this year to provide a quality education for all of our students to keep them on the road to success.

Sincerely,



Meanwhile back at Goldman Sachs: 

Here’s an instant classic for the Out-of-Touch Banker genre: a former Goldman Sachs mortgage bond trader clears $30 million in the decade following his college graduation, racks up an $8.25 million bonus in a single year, and sues because he thinks he deserves another $5 million.

Meet Deeb Salem, the G.S. alum who now works at the hedge fund GoldenTree Asset Management but once helped Goldman shed its toxic assets by betting against its clients and, as his lawyer boasted to the New York Post, shorting the mortgage market in 2006. Salem is suing his former employer, alleging that he had every right to expect a $13 million bonus in 2010.

Much of the drama focuses on Salem’s 2007 self-evaluation, which eventually made its way into the public record thanks to a 2011 Senate investigation into the bank’s habit of betting against its own clients. Salem alleges that he was punished for his honesty (the bank, perhaps upset that his review provided Congress with ammunition, warned him in 2010 for “extremely poor judgment”). But it also rewarded him with an $8.25 million bonus. The previous year, he had received a $15 million bonus—more than Goldman Sachs C.E.O. Lloyd Blankfein.

Don’t get the wrong idea about Salem, though. It’s not just the money that bothers him—it’s the filial shame he faced after telling his mother that he would be taking home a full $13 million in 2010.

The Financial Industry Regulatory Authority tossed out Salem’s case (one panelist called his claims “bullshit”), and he has since asked the New York State Supreme Court to intervene. The judge in the case has sealed the documents pending a hearing in the fall, according to Bloomberg News.

Salem believes he could have made much more had he left the firm earlier, and the scary thing is, he’s probably right—his group at Goldman brought in more than $1 billion a year during the period between 2007 and 2010. He was something of a star in a world where moving crappy products faster and more ruthlessly than your competitors yields billions of dollars of profits. But, as Goldman’s lawyer, Andrew Frackman of O’Melveny & Myers, said at a February arbitration hearing, Salem “made a ton of money.”

“He’s not entitled to more money simple because he would like to have been paid more,” Frackman said. “If that were the case, you’d have traders and bankers in here every day of the week.”

“Let’s be very clear: I was one of the most sought-after investment professionals in the mortgage industry,” Salem told the panel at the same hearing. He also compared himself to Michael Jordan in self-evaluations, writing, “I am as competitive as Michael Jordan. . . I want to win every time and I want to steamroll the opposition.”

Even Jordan would have to stand in awe of this guy’s ego.

Enjoy your $863 bucks after taxes and union dues, teachers...

* See comment here.

Governor Cuomo Pals Up With Banker/Criminal John Mack For Wall Street Outreach

Jimmy Vielkind at Capital NY:

ALBANY—Governor Andrew Cuomo is utilizing John Mack, a senior adviser to Morgan Stanley who the governor recently brought on to be an adviser on global trade, to help him navigate the titans of Wall Street, according to schedule documents released by Cuomo's office.

Cuomo began regular meetings with Mack, a former C.E.O. of the investment bank, in the fall of last year.

The schedules show Mack accompanied Cuomo to a meeting with current Morgan Stanley C.E.O. James Gorman on December 12, and to a meeting with Goldman Sachs C.E.O. Lloyd Blankfein on the following day.

Mack also attended an afternoon meeting on Veteran's Day that included senior officials from Empire State Development as well as Leslie Whatley, the director of the governor's new program to create tax-free zones rooted at public university systems. She was formerly the global head of corporate real estate at both Morgan Stanley and JPMorgan

Cuomo administration spokespeople did not immediately say what the governor discussed with Gorman and Blankfein.

Matt Taibbi on John Mack:

John Mack, the former CEO of Morgan Stanley and one of the more irritatingly unrepentant dickheads of the crisis era, gave an incredible interview to Bloomberg TV. In a discussion about executive pay, Mack said we're all being too rough on his fellow too-big-to-fail bank CEOs.

He would love, he said, "to see people stop beating up on Lloyd and Jamie," endearingly referring to Goldman chief Lloyd Blankfein and Chase chief Jamie Dimon by their first names (Mack must be in a bowling league with both men). He added: "I think that would make a lot of sense, and I'm in favor of that."

Mack went on to say that the debate over compensation was healthy, just not always warranted. "As long as shareholders reward performance," he said, "we can argue." But, he added, "The last time I checked, this business is still a business that pays people extremely well."

It's already funny that of all the injustices in the world, this was the one Mack decided to worry about on TV: the criticism of poor Jamie Dimon's 74 percent raise. But more to the point: If we really did live in a world where shareholders rewarded performance, would a CEO who just oversaw a record $20 billion in regulatory penalties even have a job, much less be getting a raise?

Mack had stones enough to be whining about people "beating up" on Jamie Dimon, given the year Chase just had. But to do so and simultaneously scold us that high compensation on Wall Street is just "shareholders rewarding performance," that's either Nobel-caliber chutzpah or laboratory-pure stupidity.

John Mack of all people should be quiet when it comes to the issue of public outrage over bank corruption. How about this, John: All of us malcontents will promise to stop beating up on your fellow CEOs, if you share with us the entire contents of your conversation with Pequot hedge fund honcho Art Samberg on June 29th, 2001?

Mack, readers may recall, was at the center of the controversy involving SEC whistleblower Gary Aguirre. Aguirre is a lawyer and investigator who began working for the SEC in September 2004. One of his first assignments was to look into a case involving a hedge fund called Pequot Capital Management, which had made a highly auspicious series of trades just ahead of, and after, a merger involving GE and a company called Heller Financial in the summer of 2001. The man making the deal was legendary Pequot trader Art Samberg.

As evidence in a Senate investigation into Aguirre's firing later revealed, Samberg made a huge investment in Heller on July 2nd, 2001, apparently without having done any research into Heller before that time. He had, however, talked the previous business day (Friday, June 29th) to John Mack, who had recently left a job running Morgan Stanley and had just returned from Switzerland, where he'd interviewed for a job with Credit Suisse. Both Morgan Stanley and Credit Suisse had worked on the merger for Heller financial. and, the Senate explained, "possessed material, non-public information about the deal."

Right after Mack talked to Samberg and Samberg invested in Heller, Pequot cut Mack in on a lucrative deal involving a Lucent spinoff that ended up more than tripling Mack's $5 million investment. When Aguirre asked permission to interview Mack about all of this, he was denied such permission by his superiors at the SEC. When he pressed, they fired him (Aguirre later won a wrongful termination settlement with the SEC in the amount of $755,000).

Ultimately, the government did not interview Mack about the Pequot deal until August 1st, 2006, exactly five days after the five-year statute of limitations on the incident had expired. In that testimony, Mack denied having foreknowledge of the Heller deal, and claimed that Samberg had wanted him to invest in the Lucent spinoff, not the other way around – despite the fact that the SEC had emails from Samberg saying Mack had nagged Samberg to let him into the lucrative deal, "busting his chops" to get in.

The government never really pursued the matter further and Mack's role in what the Senate called a "highly suspicious" trade was never fully investigated. He ultimately returned to Morgan Stanley to serve as the bank's CEO from 2005 to 2009.

All of which means exactly nothing today, over a decade after the original incidents. By now it's just one of a pile of stories about cases that never got made against Wall Street executives for questionable behaviors in the pre-crisis years.

Still, it seems to me that after having been saved by the gods from the jaws of death in the Heller episode, Mack should probably henceforth stay on the sidelines in any debate about financial corruption. That he doesn't should tell us a lot. I'm not sure these guys can even spell "shame," much less exercise any.

So Sheriff Andy Cuomo brings on Wall Street criminal John Mack to work the room when Cuomo goes to chat with other Wall Street criminals like Lloyd Blankfein and James Gorman.

What a cozy group of criminals Sheriff Andy is palling around with.

No wonder he had such a piss-poor record bringing indictments against Wall Street criminals when he was attorney general of New York State.

He's pals with them.

NYCDOE Chancellor Announcement Not Coming This Week - But De Blasio Did Appoint Former Goldman Sachs Employee To Administration Post

De Blasio: "Very likely" to announce Chancellor next week. "There will be some interim leadership... until new chancellor fully on board"
— Beth Fertig (@bethfertig) December 23, 2013

No chancellor announcement, but de Blasio did appoint a former employee of Goldman Sachs, the Vampire Squid of Wall Street, as a deputy mayor for urban affairs:

For all his campaign bluster against the two cities New York has become, Mayor-elect Bill de Blasio isn't exactly shying away from some of the people who helped make it that way. This morning, the mayor-elect announced that Alicia Glen will serve as Deputy Mayor for Housing and Economic Development, a newly created position that will aim to make housing more affordable, as well create living-wage jobs for New Yorkers.

"We need to invest in key emerging industries and affordable housing so New Yorkers have a better shot at working their way into the middle class. Alicia has the record, fresh ideas and bold outlook to make that vision a reality,” said de Blasio at this morning's press conference.

De Blasio discussed Glen's vast experience, but mostly skirted the topic of Glen's last position, as the head of Goldman Sachs's Urban Investment Group.

While at Goldman, Glen worked with the Bloomberg administration on the public-private partnerships that Bloomberg championed throughout his reign. In her speech this morning, Glen told the crowd that "we can’t remain the greatest city in the world when half of New Yorkers are living in or near poverty. We can do so much more to lift people up by investing in our neighborhoods—especially in the outer boroughs."

Here is a description of one high profile piece of Alicia Glen's previous work at Goldman:

Goldman Sachs is making its second foray into an experimental method of financing social services, lending up to $4.6 million for a childhood education program in Salt Lake City.

This “social impact bond,” in which Goldman stands to make money if the program is successful but will lose its investment if it fails, will support a preschool program intended to reduce the need for special education and remedial services. The upshot, in theory, is that taxpayers will not have to bear the upfront cost of the program.

Goldman is being joined in this effort by the Chicago investor J.B. Pritzker, who is providing a subordinate loan of up to $2.4 million, bringing the total financing to $7 million. The loans will be announced at an event in Chicago on Thursday.

“Social impact bonds are an entirely new way of financing things that have traditionally been paid for either through philanthropy or by taxpayer dollars,” said Alicia Glen, head of Goldman’s urban investment group.

Though the effectiveness of this type of financing remains unproved, it has gained a prominent adherent in New York City, which allowed Goldman to invest nearly $10 million in a jail program last year. The city was the first in the United States to test social impact bonds.

For Goldman, which could gain a public-relations benefit from the investment, Salt Lake City has become an important business center. The city is home to Goldman’s second-largest office in the United States, and the Wall Street firm held its annual meeting there in May.

The loans are going to the United Way of Salt Lake, which oversees the Utah High Quality Preschool Program. The investment’s success will be measured by the level of cost savings when children do not need to use special education services, which are financed by the state.

The loans carry an interest rate of 5 percent, which is paid along with the principal if the program is successful. In the best case, Goldman and Mr. Pritzker would make additional “success fees.”

“We’re creating something sustainable that has a focus on returns,” Mr. Pritzker said. “This titillates my interest in business and engages me.”

This type of financing, which was first used in Britain in 2010, has raised eyebrows. Data on the New York investment, focused on men incarcerated at Rikers Island, is not yet available.

“I think it’s distressing the degree to which a new industry has been built around social impact bonds before it’s ever been proven viable,” said Mark Rosenman, a professor emeritus at Union Institute and University in Cincinnati. “We ought to work it to fruition in a couple places before we start promoting it.”

Ah yes - creating financial instruments so that Goldman can makes bets on students who need support services, giving the program the incentive to find ways to "demonstrate" the children do not need these services.

Boy, that sounds like there could be no down side there.

And who helped come up with this new scheme but Alicia Glen, Bill de Blasio's new Deputy Mayor for Housing and Economic Development.

Maybe I'm just cynical, but it sounds to me like de Blasio just appointed the scum of the earth to be a deputy mayor.

Meet the new boss, same as the old boss.

Bloomberg LP Terminals Used To Spy On Users

The spymaster is at it again:

Irked Goldman Sachs brass recently confronted Bloomberg LP over concerns reporters at the business news service have been using the company’s ubiquitous terminals to keep tabs on some employees of the Wall Street bank, The Post has learned.

The ability to spy on Bloomberg terminal users came to light recently when Goldman officials learned that at least one reporter at the news service had access to a wide array of information about customer usage, sources said.

In one instance, a Bloomberg reporter asked a Goldman executive if a partner at the bank had recently left the firm — noting casually that he hadn’t logged into his Bloomberg terminal in some time, sources added.

Goldman later learned that Bloomberg staffers could determine not only which of its employees had logged into Bloomberg’s proprietary terminals but also how many times they had used particular functions, insiders said.

The matter raised serious concerns for the firm about how secure information exchanged through the terminals within the firm actually was — and if the privacy of their business strategy had been compromised.

“You can basically see how many times someone has looked up news stories or if they used their messaging functions,” said one Goldman insider.

“It made us think, ‘Well, what else does [Bloomberg] have access to?’ ”

Bloomberg’s terminals have become the lifeblood of Wall Street trading shops, particularly those that mine the terminals’ reams of data to help make daily trading decisions.

Wall Street firms pay about $20,000 a year to rent each terminal — allowing the company founded by Mayor Michael Bloomberg to ring up annual revenue of more than $6 billion.

The little man wants to control everything, doesn't he?

Shame he won't use that information to hold the criminals at Goldman accountable.

The Faces Of Class Warfare

Wall Street CEO's, of course:

Incredulous that Wall Street investment bankers and billionaire CEOs have descended on Washington in the midst of ongoing budget talks to tell Americans that they should "lower their expectations" when it comes to the security of their retirement and future health care, Vermont Senator Bernie Sanders took to the Senate floor Thursday to call out the audacity of corporate-minded millionaires and billionaires, calling them the new "face of class warfare" in the United States.

"I find it literally beyond comprehension, that we have folks from Wall Street who received huge bailouts from the people of our country—from working families in this country—because of the greed and recklessness and illegal behavior, which Wall Street did to drive us into this recession, and now these very same people are coming here to Congress to lecture us and the American people about how we have to cut Social Security, Medicare, and Medicaid while they enjoy huge salaries and retirement benefits."

Sanders specifically called out CEO of Goldman Sachs, Lloyd Blankfein, who has recently been making both the media rounds and consulting with lawmakers regarding the ongoing tax and budget debate in Washington during the current lame duck session. Blankfein, one of the highest paid executives on Wall Street and worth hundred of millions personally, made the comments about 'lowered expectations' in a recent evening news interview with CBS and said that average Americans should understand that the US simply can't "afford" to maintain programs like Social Security and Medicare.

The facts of such sentiments, as many economists repeatedly point out, are false, but Sanders said that Blankfein delivered the familiar rightwing trope "with all the sympathy for someone struggling to get by on $14,000-a-year retirement that you’d expect from a Wall Street banker paid $16 million last year."

The chutzpah of Blankfein, whose firm Goldman Sachs directly benefited from the AIG bailout, is large but not surprising.

There is an arrogance to many of these corporate types, especially the CEO's and the hedge fundies, that they're smarter than everybody else, they're harder working than everybody else, and they deserve more than everybody else.

The reality is, the system is rigged in their favor and many of them are ethically-challenged anyway so even if it wasn't rigged in their favor they would steal their way to the top.

Witness Goldman where they sold worthless CDO's to their own clients, knowing those CDO's were worthless, than shorted the very same so that they could make money coming and going.

Why would anybody in government listen to a criminal like Lloyd Blankdfein?

Unfortunately it is because he is rich and he, along with the rest of the 1%, own those guys.

What is good for Lloyd Blankfein is bad for the rest of the country - but that won;t stop the geniuses in charge from giving him what he wants.

Bertha Coombs: Dumbest Tweet Of The Day

The NY Times is running an article today about the increase in cheating in schools.

CNBC's Bertha Coombs tweets the following about the story:

NYTimes: Studies Find More Students Cheating -Are shame & guilt obsolete? How do you sleep when you "succeed" cheating?

Coombs covers the financial markets - you know, the venue where Goldman Sachs bundled worthless financial products to unsuspecting customers while shorting those same products because they knew they were worthless and made hundreds of millions of dollars both coming and going.

This is the same market where MF Global "lost" a billion dollars of customer money making trades they weren't supposed to trade but no individual was ever brought to account for the loss.

It is the same market where 16 banks colluded to "fix" the LIBOR rate that underlies most financial products and loans in order to, first, make more money, and then later in '08, to make their books look better than they were.

And Coombs has the nerve, the audacity to ask how students can sleep at night knowing they've succeeded by cheating?

She is either the dumbest person on the planet or the most compliant corporate shill there is.

You want to see some cheaters who got ahead by cheating, Bertha?

Look the fuck around you.

You're surrounded by liars, cheats, con artists, pirates, and corporate criminals - and that's just in the CNBC offices.

This nation is run by cheaters in Washington, on Wall Street, in the media.

The kids are just learning the lessons they see from the adults around them - and they're learning them well.

The Best and Brightest are cheating in Stuyvesant High and at Harvard.

And soon most of them will take that cheating someplace where they can really cash in - Wall Street and the corridors of power in Washington.

Mayor Bloomberg Visits Goldman To Lift Spirits Of Crooked Bankers

Is he the Mayor of New York City or the Mayor of Goldman Sachs?

On Wednesday, accomplished table tennis player Greg Smith announced in a New York Times Op-Ed that he was quitting his job at investment firm Goldman Sachs, because the firm’s “culture” has become, at some point in the last 12 years, “toxic.” Goldman Sachs responded with a spirited P.R. campaign in which it claimed that Smith was not actually a very important person to the firm, and a leaked memo from Lloyd Blankfein in which he argued that Goldman could not possibly be evil because a recent internal survey proved that Goldman employees enjoy working at Goldman.

Despite that very good spin, Goldman Sachs lost $2 billion worth of market value as its shares fell 3.4 in trading over the course of the day (“oh man, some guy says Goldman Sachs is evil? I HAD NO IDEA” — the market). Thankfully, one hero stands ready to defend Goldman Sachs from public scorn: New York City Mayor Michael Bloomberg.

Bloomberg actually visited Goldman Sachs headquarters today to personally cheer up very sad bankers. Bloomberg met with Goldman head Blankfein and various other members of the 1 percent, in order to reassure them that they are good people who do good work, even though that is a ridiculous delusion that only fellow members of that class still believe.

“The mayor stopped by to make clear that the company is a vital part of the city’s economy, and the kind of unfair attacks that we’re seeing can eventually hurt all New Yorkers,” Bloomberg’s spokesman said. Bloomberg is a billionaire mogul who owns a financial information company, so Goldman Sachs and other major financial institutions are a vital part of his economy.

Bloomberg continued to defend Goldman Sachs on his radio program:

“I don’t know whoever said what,” Bloomberg said on WOR Radio’s John Gambling Show.

“But even if it was said, it’s a few people and, you know, Goldman Sachs is a firm that’s been around for well over a hundred years and it’s a great firm.”

“It’s my job to stand up and support companies that are here in the city that bring us a tax base that employ our people and I’m going to do that.”

He called news coverage of the letter “ridiculous” and “not something we should do.”

There you have it - Bloomberg defends news organizations printing Teacher Data Reports that use a value-added measurement for evaluations with a maximum margin of error of 87% but says there's no way the NY Times should have published Smith's resignation letter and harsh criticism of Goldman or the media should have covered the story.

Alex Pareene at Salon points out that Bloomberg Views, the propaganda wing of Bloomberg News that hired Jonathan Alter and a bunch of other public relations specialists for the 1%, also defended Goldman Sachs while attacking Smith:

“Bloomberg View,” the opinion arm of Mr. Bloomberg’s media company that operates out of the offices of his charity, also defended Goldman in an unsigned editorial mocking Smith for failing to realize that Goldman exists to make money by any means necessary, which is obviously a self-evident Good Thing for The Economy and The Country. “If you want to dedicate your life to serving humanity, do not go to work for Goldman Sachs,” the Editors write. Then: “Goldman and other investment banks do perform an important role in our economy, and Goldman bankers — most of them, at least — can hold their heads up high.” I am sure they are relieved to hear they have Bloomberg View’s vote of confidence.

But Bloomberg Businessweek took Goldman to task for being, you know, crooks:

During the Great Depression, the then-small partnership on Pine Street became a target of national ridicule because of a scandal involving the Goldman Sachs Trading Corp., a publicly traded investment trust that blew up after the stock market crash of 1929.

For years, comedian Eddie Cantor, who had lost $100,000 and sued Goldman Sachs for $100 million, made the firm a running joke in his stand-up routines. In one of his bits, Cantor would appear onstage with a stooge who tried to squeeze juice from a dry lemon.

“Who are you?” Cantor would ask. Without missing a beat, the stooge would say, “The margin clerk for Goldman Sachs.”

Ever since being subjected to Cantor’s barbs, Goldman Sachs has cultivated an image not just as Wall Street’s preeminent firm but also as a paragon of financial virtue. But Goldman’s supposedly pristine reputation has always been more invented than earned, Bloomberg Businessweek reports in its March 19 issue.

Read the rest of the Bloomberg Businessweek article - it shows you exactly the kind of crooked culture Smith was talking about at Goldman.

Perhaps Mayor Bloomberg needs to go to the Bloomberg Businessweek offices and give a stern warning to the editors there to stop saying nasty things about poor Goldman Sachs and it's merry men.

Or maybe Bloomberg can mind his own business and stop defending crooked behavior on Wall Street.

Nah - that'll never happen.

Instead he'll launch unfair attacks on teachers by giving error-riddled test score data with a MOE of 87% to the media to publish and fire 50% of teachers and close as many schools as he can before he leaves office.

Yeah, that's Mayor Bloomberg all right - the Mayor of Goldman Sachs, the Mayor of the 1%.

Bash teachers, defend crooked bankers.

New Yorkers ought to start giving Bloomberg the approval they gave him after the Bloomberg Blizzard of 2010.

Or the greeting they gave him in Rockaway.

Or the one in Harlem on MLK Jr. Day.

Frankly, this arrogant oligarch deserves nothing less.

Goldman Screws Muppets

Nothing like one of their own exposing them in public for being the crooks they are:

Until early Wednesday morning, Greg Smith was a largely anonymous 33-year-old midlevel executive at Goldman Sachs in London.

Now everyone at the firm — and on Wall Street — knows his name.

Mr. Smith resigned in an e-mail message to his bosses at 6:40 a.m. London time, laying out concerns that Goldman’s culture had gone haywire, putting its own interests ahead of its clients.

What the e-mail didn’t say was that about 15 minutes later, an Op-Ed article he had written detailing his criticisms was to be published in The New York Times. “It makes me ill how callously people still talk about ripping off clients,” he wrote in the Op-Ed article.

The Op-Ed landed “like a bomb,” inside Goldman, said one executive who spoke on the condition of anonymity.

The article reignited a debate on the Internet and on cable television over whether Wall Street was corrupted by greed and excess. By noon, television crews crowded outside Goldman’s headquarters in Lower Manhattan. More than three years after the financial crisis, the perception that little has changed on Wall Street — and that no one has been held accountable for the risk-taking that led to the crisis — looms large in the public consciousness.

...

Although he isn’t highly paid by Wall Street standards — earning about $500,000 last year, according to people briefed on the matter — Mr. Smith is part of what some Goldman staff members and alumni refer to as a sizable, yet silent contingent within the investment bank. These people are increasingly frustrated with what they see as a shift in recent years to a profit-above-all mentality.

Evidence of this shift, they say, can be seen in the accusations brought by the Securities and Exchange Commission in 2010 that the firm intentionally duped certain clients by selling a mortgage-security product that was designed by another Goldman client betting that the housing market would crash. More recently, a Delaware judge criticized Goldman over the multiple, and potentially conflicting, roles it played in brokering an energy deal. (In both cases, Goldman has denied any wrongdoing.)

Even the greed-loving, Wall Street-worshipping, union-bashing shills at the Daily News felt the need to criticize Goldman:

Goldman Sachs’ clients will be the ultimate judge of whether the venerable Wall Street investment bank is a topflight firm or closer to the tank of scheming sharks portrayed on Wednesday’s New York Times Op-Ed page.

Goodness knows, over the years, while the firm has profited handsomely, Goldman has managed to make its customers plenty of money.

That said, the essay by Greg Smith, “Why I Am Leaving Goldman Sachs,” will stand as a landmark cri de coeur , one that will have long-term reverberations for the company and the industry it so powerfully represents.

Smith ended a 12-year career at Goldman with a resignation letter for the ages. He wrote of a growing culture of voracious greed and described an ethic that put profit above all else — especially clients’ interests.

Those clients were left, in Smith’s words, like muppets with their eyes torn out.

Not surprisingly, the firm views the column as overamplified griping by one disgruntled employee. Perhaps. There are two or more sides to every story. But Smith’s descriptions are harrowing.

He described his pleasure, from his first day on the job as a recent college grad, at being a company man. He advised major clients around the world, worth more than a trillion dollars in assets. He sought out and mentored potential hires, even appearing in a Goldman recruitment video.

Then, a drastic shift in corporate culture changed everything.

“I knew it was time to leave,” he wrote, “when I realized I could no longer look students in the eye and tell them what a great place this was to work.”

Wrote Smith: “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets.’ ”

“These days, the most common question I get from junior analysts about derivatives is, ‘How much money did we make off the client?’ . . . You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner hearing about ‘muppets,’ ‘ripping eyeballs out’ and ‘getting paid’ doesn’t exactly turn into a model citizen.”

Indeed they don't.

Better hold some teachers accountable, eh Daily Newsers?

That'll make things all better.

Because so far, nobody - I mean nobody - from Wall Street has been held accountable for the financial collapse and the ethical and moral lapses that lead to it.

The "Crisis In Accountability" in New York Starts With Andrew Cuomo And His Wall Street Cronies

The New York Post reports the following:

It’s your toxic mortgages at work.

Goldman Sachs investment banker Jeffrey Verschleiser, accused in lawsuits of illicitly profiting from bad mortgages that led to the 2008 meltdown, is spending $1 million to take over a swanky Aspen, Colo., hotel for his Upper East Side daughter’s bat mitzvah, sources said.

Verscheisler is taking over the luxury Hotel Jerome for the entire weekend, and perks for the guests reportedly include autographs from pro skiers.

The Aspen Daily News reports that Verschleiser also rented out the city-owned Aspen Recreational Center, which will close at 4 PM today instead of the usual 9 PM so that the Verschleiser party can take it over.

Gonna be a nice weekend for the Verschleiser family.

And why wouldn't it be?

When you see how much money this crook stole with impunity on Wall Street while the authorities - including then Attorney General Andrew Cuomo - stood by and watched, how could it be otherwise?

So how did Jeffrey Verschleiser get into this position where he could buy up half of Aspen for his daughter's Bat Mitzah?

Matt Taibbi takes up the story from there:

The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally.

Back in the day, you see, Verschleiser headed Bear’s mortgage-backed securities operations. Toward the end of his tenure, his particular specialty began with what at the time was the usual industry-wide practice, putting together gigantic packages of crappy subprime mortgages and dumping them on unsuspecting clients.

But Verschleiser reportedly went beyond that. According to a lawsuit later filed by a bond insurer called Ambac, Verschleiser also masterminded a kind of double-dipping scheme. What he would do is sell a bunch of toxic mortgages into a trust, which like all mortgage trusts had provisions written into their pooling and servicing agreements (PSAs) that required the original lenders to buy the loans back if they went into default.

So Verschleiser would sell bad mortgages back to the banks at a discount, but instead of passing the money back to the trust, he and other Bear execs allegedly pocketed the funds.

From the Atlantic story by reporter Teri Buhl:

The traders were essentially double-dipping -- getting paid twice on the deal. How was this possible? Once the security was sold, they didn't have a legal claim to get cash back from the bad loans -- that claim belonged to bond investors -- but they did so anyway and kept the money. Thus, Bear was cheating the investors they promised to have sold a safe product out of their cash. According to former Bear Stearns and EMC traders and analysts who spoke with The Atlantic, Nierenberg and Verschleiser were the decision-makers for the double dipping scheme.

Imagine giving someone a hundred bucks to buy a bushel of apples, but making a deal with him that he has to buy back any apples that turn out to have worms in them. That's what happened here: Bear sold the wormy apples back to the farmer, but instead of taking the money from those sales and passing it on to you, they simply kept the money, according to the suit.

In an email one Bear exec called the bonds Bear was hawking "sacks of shit."

Mmm - but that was lucrative shit for Jeffrey Verschleiser, wasn't it?

But it gets worse.

Back to Taibbi:

So did Verschleiser himself know the mortgages were bad? Not only did he know it, he went so far as to tell his colleagues in writing that it was a waste of money to even bother performing due diligence on the bad bonds:

Jeffrey Verschleiser even said in an e-mail that he knew this was an issue. He wrote to his peer Mike Nierenberg in March 2006, "[we] are wasting way too much money on Bad Due Diligence." Yet a year later nothing had changed. In March 2007, Verschleiser wrote to Nierenberg again about the same due diligence firm, "[w]e are just burning money hiring them."

One of the ways that banks like Bear managed to convince investors to buy these bonds was by wrapping them in bond insurance through companies like Ambac, commonly known as “monoline” insurers. Investors who knew the bonds were insured were less worried about default.

Verschleiser, seeing that Bear had gotten firms like Ambac to insure its “sack of shit” bonds, saw here a new opportunity to make money. He first induced the monolines to insure the worthless bonds, then bet against the insurers! (Is it any wonder this guy ended up hired by Goldman, Sachs?) From the Atlantic story again:

Then in November 2007, Verschleiser wrote to his risk committee that he knew insurers for mortgage securities were going to have big financial problems. He suggested they multiply by ten times the short bet he'd just made against stocks like Ambac. These e-mails show Verschleiser's trading desk bragging to firm leadership that he made $55 million off shorting insurers' stock in just three weeks.

So in essence, Verschleiser was triple-dipping. First he was selling worthless “sacks of shit” to investors, representing them as good investments. Then, he kept the money from the return sales of the wormy apples. And then, on top of that, he made money by betting against the insurers he was sticking with these toxic assets

Surely New York Attorney General Andrew Cuomo or the SEC or some other regulatory body stepped in to put handcuffs on this man until he could be tried for fraud?

Nope.

As the NY Times reported April 14, 2011, not one major participant in the financial collapse of 2008 has been criminally prosecuted and sent to jail.

That holds for Jeffrey Verschleiser.

As Taibbi writes,

We all know what happened from there. Bear, Stearns went under, thanks in large part to insane schemes like Verschleiser’s, and all of us were forced to pick up at least part of the tab as the Fed spent billions subsidizing Bear’s emergency takeover by JP Morgan Chase. In subsequent litigation, Chase has steadfastly refused to buy back the bad mortgages dumped on investors by the likes of Verschleiser, and has even fought tooth and nail to prevent the information in the Ambac suit from being made public.

Ambac went into Chapter 11 bankruptcy in 2010 for a variety of reasons, some of which had nothing to do with its losses in deals like these. But certainly Ambac and other monoline insurers like MBIA suffered for having insured worthless mortgage bonds sold onto the market by the Verschleisers of the world. Ambac in its suit asserted that it paid out over $641 million in claims related to the bonds from the Bear deals.

With all of this, though, Verschleiser landed happily on his feet. He reportedly heads Goldman’s mortgage division now. And after cutting a mile-wide swath of losses through the American economy, helping destroy two venerable firms in Bear and Ambac, bilking the taxpayer for untold millions more (he is also named in a lawsuit filed by the Federal Housing Finance Agency for allegedly speeding bad loans onto securitization before they defaulted), Verschleiser is now living the contented life of a proud family man, renting out a 94-room hotel for three days for his daughter’s Bat Mitzvah.

Andrew Cuomo said this week there is a "crisis of accountability" in New York.

He was talking about the school system and was alleging that public school teachers are unaccountable because they refuse to be evaluated by a system that utilizes student test scores and a value-added measurement with a large margin of error and wide swings in findings from year to year.

Pointedly, he was NOT talking about a justice system that allows a Jeffrey Verschleiser to criminally triple-dip his way to a very wealthy and lucrative lifestyle with impunity.

Taibbi writes:

Anyway, given that much of Verschleiser's questionable behavior is in writing, his case sure seems court-ready. But for whatever reason, he has not been indicted.

One can almost understand a regulator not wanting to take on the whole circular securitization scheme -- Bear lends money to corrupt mortgage firm, mortgage firm makes bad loans, Bear packages bad loans and sells to investors, then takes the proceeds and creates more bad loans -- because it is so complex and difficult to prove.

But in this case there are simple issues of fraud and theft that could be taken on without having to prosecute broader crimes related to securitization. But prosecutors, apparently, just blew those off. In the current environment, regulators even miss the layups.

And therein lies the REAL crisis in accountability in New York and the country at large.

Andrew Cuomo himself, along with the other regulators who let these crimes go largely uninvestigated and entirely unpunished, need to be held accountable, as do crooks like Jeffrey Verschleiser.

A Financial Snake Pit

The Senate report on the financial collapse was released yesterday and here is what it found:

Goldman Sachs misled clients and Congress about the firm’s bets on securities tied to the housing market, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis said.

Senator Carl Levin, releasing the findings of a two-year inquiry yesterday, said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value.

The Michigan Democrat also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified in Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue.

“In my judgment, Goldman clearly misled their clients and they misled the Congress,” Levin said at a press briefing yesterday where he and Senator Tom Coburn, an Oklahoma Republican, discussed the 640-page report from the Permanent Subcommittee on Investigations.

Much of the blame for the 2008 market collapse belongs to banks that earned billions of dollars in profits creating and selling financial products that imploded along with the housing market, according to the report. The Levin-Coburn panel levied its harshest criticism at investment banks, in particular accusing Goldman Sachs and Deutsche Bank AG of peddling collateralized debt obligations backed by risky loans that the banks’ own traders believed were likely to lose value.

Really - banks were at fault for the financial crisis?

I had heard it was teachers.

Well, regardless, now that Obama is in full re-election mode, you can be sure there is no way his Justice Dept. is going after Goldman or anybody else on Wall Street.

They might indict a teacher or two though.

How Goldman Sachs And Wall Street Caused The Wisconsin Mess

From the CBS Business Network:

Wisconsin state employees fighting for their jobs should ask Goldman Sachs (GS) CEO Lloyd Blankfein for their money back.

What’s the connection? During the dog days of the financial crisis in 2008, the investment bank advised clients to bet that Wisconsin and 10 other U.S. states would go broke by purchasing credit default swaps against their debt. For Goldman and other Wall Street firms that used this ploy, the beauty part was that they had also previously earned millions in fees by helping most of those states sell municipal bonds.

In other words, these banks made money by finding investors to buy state debt, then made more money by selling derivatives to other investors who wanted to short that debt. As Bloomberg reported at the time:

As part of a September presentation to institutional investors on “Best Long and Short Risk Strategies,” Goldman recommended buying credit-default swaps on “a basket of liquid State General Obligation credits with current and worsening fiscal outlooks,” including California, Florida, Nevada, Ohio, Wisconsin and Michigan.

The firm also recommended the derivatives on states with “significant unfunded pension” and other retiree obligations, including Illinois, Connecticut, Hawaii, New Jersey, Massachusetts and Nevada.

2008: A very bad year for Wisconsin

For states, growing concerns about their credit raised their borrowing costs. Estimates suggest that a one percent interest rate hike on a $1 billion bond issue would cost taxpayers roughly $10 million a year. In 2008, rates in Wisconsin more than tripled, reaching 15 percent.

Wisconsin, other states, and scores of town and cities around the country also lost big after going to Wall Street to buy variable-rate auction securities and other types of structured financial products. The market for auction-rate securities collapsed in early 2008, leaving states and municipalities holding the bag. Goldman and other Wall Street banks agreed that year to pay a total of $160 million in fines over and repurchase $15 billion worth these securities to settle several state probes into the transactions.

In another case of speculation gone awry, some Wisconsin school districts lost millions after purchasing so-called synthetic collateralized debt obligations. Wall Street banks sold CDOs to bet on the value of housing in the years leading up the financial crisis.

How the housing bubble killed pensions

Ancient history, you say? Not at all. Because whatever Wisconsin Governor Scott Walker says about the state’s pension problems — which, incidentally, are far less severe than he claims — they’re not the result of employees contributing too little to their retirement. Rather, Wisconsin’s shortfall stems largely from the state getting killed in the stock market during the financial crisis.

As the housing bubble was inflating in 2003, for instance, Wisconsin issued $950 million in auction-rate bonds to fund its pension plan. The bonds did well until mid-2007, when souring subprime loans began rippling into the auction-rate and other bond markets. That turned into a full-blown crisis early the following year, when Goldman, Citigroup (C) and other large Wall Street firms stopped supporting auctions.

The bottom fell out. As the state’s auditor told lawmakers last fall in explaining the long-term impact of Wisconsin pension funds losing nearly $24 billion in 2008:

[T]he value of Wisconsin Retirement System assets has fluctuated significantly over the past ten years as financial markets have experienced their worst decline since the 1930s. For example, losses in 2008 totaled $23.6 billion. While these losses were partially offset by gains of $13.5 billion in 2009, the combined value of the two retirement funds on December 31, 2009, was 17.1 percent below its peak in 2007. The losses of 2008 will significantly affect Retirement System participants and employers for the next several years.

What if states had played it safe?

That’s the broader lesson here for Wisconsin and other states. Numerous state pension funds are hurting not because employee benefits are excessive, as Walker contends (As an aside, see here for a remarkable recording of the governor discussing his plans to, among other things, lay off state workers with someone he thinks is chemicals mogul and Tea Party activist David Koch.) It’s because the financial crisis — caused in part by Wall Street pushing risky products and worsened by banks betting against their own clients — crushed the stock market, which lowered the value of pension fund assets.

Economist Dean Baker of the Center for Economic and Policy Research calculates that if after 2007 states had instead invested their retirement funds primarily in 30-year Treasury bonds, then state and local pension plans would be $850 billion richer (click on chart below to expand).

As for Blankfein, he should be able to spare a little change for Wisconsinites. His base salary recently tripled, to $2 million, even after he warned the Financial Crisis Inquiry Commission last year that raising base pay on Wall Street causes bankers to take risks. No argument there.

Yeah, but this is all about greedy public employees who make too much money and receive too many benefits, you know.

Nothing to do with these crooks.

A Fecal Matter Sandwich

That's what the Obama administration education policy is serving up, according to Jeffbinnc at Open Left.

He has a nice summary of all the recent criticism against the "More and Better Tests!" policy we are getting from the Obama administration and will hear even more about during the State of the Union.

Let's face it - the people pushing the high stakes testing reform movement stand to make billions from the test prep, the test administration and the test creation.

Bill Gates wants more technology in the classroom.

He makes computer software, doesn't he?

Hmmm....

The ed reformers at the Washington Post want students to take high stakes tests several times a year in every subject and hold teachers and schools accountable for those tests.

The Washington Post company owns Kaplan Test Prep company, doesn't it?

Hmmm....

The hedge fund industry is all excited about market-driven reforms that promote non-unionized charters run by for-profit companies or education management organizations beholden to Wall Street.

Goldman Sachs and Warren Buffett are two Wall Streeters with a piece of that action, aren't they?

Hmmm....

Joel Klein and Rupert Murdoch say in order for public education to enter the 21st century, students need to be educated online by computer programs rather than in school buildings by teachers.

Rupert Murduch just bought an online education company that he wants Joel Klein to help run, didn't he?

Hmmm....

The nexus between profit and education reform, or perhaps I should say between corruption and education reform, is pretty clear.

But you want hear any of that from the Education Shyster-in-Chief this week at the SOTU address.

Instead he'll offer some jive about how reform is essential to the economic future of the nation.

And he will be right, sort of - but what he won't be saying is that the economic future he will be talking about is not the nation, but rather the corporate overlords like Gates, Buffett, Goldman Sachs and the other Wall Streeters and hedge fundies who own this country and who satnd to make billions from his policies.

WSJ: The Raids On Three Hedge Funds "Sent Shock Waves" Through The Financial World

Gee - maybe the masters of the universe can get scared about something:

A three-year insider-trading investigation shifted into high gear Monday as government agents raided the offices of three large hedge funds, sending shock waves through the financial world.

...

The raids helped push the Dow Jones Industrial Average down about 150 points before a rally left the index down 24.97 points. Financial stocks were hit, with Goldman Sachs Group Inc. down 3.4% following news that investigators also were examining whether Goldman bankers had leaked information about deals. Goldman declined to comment.

The Dow recovered, but it's interesting to see that the prospect of handcuffs and perp walks can still scare the hedge fundies and banksters.

WSJ: Insider Trading Investigation Focuses On Bankers, Hedge Fundies

This I like:

Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter.

The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.

The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.

One focus of the criminal investigation is examining whether nonpublic information was passed along by independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge.

Among the expert networks whose consultants are being examined, the people say, is Primary Global Research LLC, a Mountain View, Calif., firm that connects experts with investors seeking information in the technology, health-care and other industries. "I have no comment on that," said Phani Kumar Saripella, Primary Global's chief operating officer. Primary's chief executive and chief operating officers previously worked at Intel Corp., according to its website.

In another aspect of the probes, prosecutors and regulators are examining whether Goldman Sachs Group Inc. bankers leaked information about transactions, including health-care mergers, in ways that benefited certain investors, the people say. Goldman declined to comment.

Any time I see the words "Goldman Sachs," "investigation," and "criminal charges" in the same sentence, I smile.

The only thing that would make me happier is to see the words "Geoffrey" and "Canada" added to that sentence.

Mr. Canada, of course, has made a career of taking money from these crooks to use for his "charity" work.

If you take money from crooks knowing they're crooks, does that make you a crook too?

Goldman Sachs, Dirty Money and the Harlem Children's Zone

Goldman Sachs gave a $20 million grant to the Harlem Children's Zone through it's charity wing, Goldman Sachs Gives.

According to Geoffrey Canada, founder of the HCZ, that money will enable the organization to build a new school, among other things.

Isn't that wonderful!

But how much of that money Canada and the HCZ is receiving from Goldman Sachs was made from human misery and/or criminal activity?

In April, Goldman Sachs was charged by the S.E.C. with fraud in the structuring and marketing of a CDO (collateralized debt obligation) tied to subprime mortgages.

Goldman settled that case in July, agreeing to pay $550 million dollars in the settlement. Goldman did not admit wrongdoing, but did agree to pay the fine for "marketing materials for Abacus 2007-AC1 that contained 'incomplete information.'"

In other words, they lied to the people they were selling their financial product to. They made believe the product had some value when they knew that it was essentially worthless (full of mortgages that were in danger of default.) In fact, Goldman even made side bets AGAINST Abacus 2007-AC1.

Here is how Bloomberg News described the transactions:

April 17 (Bloomberg) -- From July 2004 through April 2007, as credit markets boomed, Goldman Sachs Group Inc. created 23 financial transactions called Abacus, the word for a relatively crude counting tool involving the shuffling of beads.

Yesterday, the Securities and Exchange Commission sued the bank for securities fraud in what would be the penultimate offering in the series, according to Bloomberg data.

The bank used the deals to off-load the risk of mostly subprime home loans and commercial mortgages to investors, either as hedges for similar positions or to bet against securities itself. While the data show New York-based Goldman Sachs issued at least $7.8 billion of Abacus notes, the risk passed to investors was multiples higher.

The Abacus transactions are so-called synthetic collateralized debt obligations, which marry two financial innovations that contributed to the worst collapse in financial markets since the Great Depression.

The financial tools, often called technologies, are credit- default swaps, used to transfer the risk of losses on debt, and securitization, used to slice the risk in a pool of assets into various new securities.

Abacus deals were filled with default swaps that offered payouts to Goldman Sachs if certain mortgage bonds didn’t pay as promised, in return for regular premiums from the bank.

Some of the cash needed for the potential payouts to Goldman Sachs would be raised upfront, and essentially placed in escrow, from sales of Abacus CDO notes with varying ratings. The grades were tied to how many of the underlying securities needed to default before the CDO classes would.

Such securitization enabled debt with the lowest investment-grade ratings to be transformed, in part, into AAA securities that turned out to not be as safe as that ranking suggested. At least $5 billion of Abacus slices now carry junk ratings, below BBB-, from Standard & Poor’s, or have defaulted, Bloomberg data show.

The SEC said that Goldman Sachs created and sold Abacus 2007-AC1 without disclosing that hedge fund Paulson & Co. helped pick the underlying securities and also bet the CDO would default. Paulson was proved correct, and his hedge fund eventually turned a $1 billion profit and CDO investors lost a similar amount, according to the SEC.

So Goldman made money both coming and going - they sold a worthless financial product that was guaranteed to go belly up to their customers without telling them it was worthless, then made MORE money by betting against that very product themselves.

Ingenious - no wonder they call these guys Masters of the Universe!

But that's not the only fraudulent way Goldman Sachs makes money.

Goldman Sachs also owns Litton Loan Servicing - a company that has been sued numerous times for all kinds of fraudulent business practices.

Back in 2005, customers of Litton Loan charged the company with fraud in a class action lawsuit:

The Nationwide Class alleged claims based on violations of the Real Estate Settlement Procedures Act ("RESPA") relating to Litton's improper actions in imposing late fees or treating payments as late during the 60-day grace period following the effective date of loan transfer if a borrower sends a payment to his or her old servicer on time. The California Subclass alleged claims based on violations of California law relating to Litton's unfair business acts and practices with respect to the servicing of loans.

Litton Loan settled that case in 2009, but since the court found that the plaintiffs had not "established the elements needed to determine predominance or superiority on their claim for actual damages," statutory damages were capped at $500,000 for the entire Class.

This class action lawsuit was far from the only complaints against Litton Loan Servicing. Here is a whole host of complaints at Consumercomplaints.com (66 pages of them!) against Litton.

Here is one complaint about Litton from that site:

PATRICIA of CHICAGO, IL September 20, 2009

In December 2005/January 2006, without our knowledge or consent, our mortgage was sold to Litton Loan. Before we knew what hit us, our home was foreclosed. In January 2007, we read in the daily newspaper that our house was being "sold" and actually went to the "foreclosure sale." We were directed to the offices of Pierce & Associates -- the equally atrocious bulldogs who are rubber-stamping case-after-case amassing exorbitant attorney fees and court costs in the Foreclosure Court on behalf of Litton Loan. Finally, an agent of Litton sent a fax through Pierce with a Forbearance Agreement; and DESPERATE to keep our home, we made lump sum and monthly payments over the next 10 months in excess of 47,000.00 (I have copies of the cashiers checks). During this time, we attempted to contact Litton Loan hundreds (maybe even thousands) of times. Either the voicemail box was full and we couldn't leave a message, or the voicemail indicated the agent was helping another customer and would return our call in 72 HOURS. On occasion, we were fortunate enough to connect to a "live" person, they were clueless as to our situation, some became rude and condescending, and more often they said we needed to speak to a supervisor because according to their records, our home was foreclosed. EVERY TIME IT WAS A DIFFERENT AGENT, WITH THE NAME OF A "NEW" SUPERVISOR. Guaranteed they have a HUGE EMPLOYEE TURNAROUND!

To date, we have no evidence that our OVER 47,000.00 was ever applied to our mortgage loan. In January 2007, we retained a foreclosure firm who called off the dogs and ATTEMPTED but FAILED to negotiate with any one Litton officer. They would come to terms, and Litton was penalized on more than one occasion, but then the Litton player would change, and we were right back to square one. Well, the Sheriff's Officers came to the door with battering rams to evict us. They gave us ten (10) days. A week later, a Notice of Eviction was served on THE WRONG PARTY! They didn't even have our names on the complaint. We looked like fools in the eviction court, and refused to be under the jurisdiction of the Court. Simultaneous, we hired an attorney to file a complaint in the Foreclosure Court, and on October 14, 2008, the Circuit Court of Cook County, Illinois ordered: This cause coming to be heard on Defendant's Motion to Quash Service of Summons, upon due notice, and the Court being fully advised: It Is Hereby Ordered: That the Defendants having met their burden of proof, the Motion to Quash Service of Summons is granted, and all orders and the issued deed are void ab initio.

THEREAFTER, WE CONTACTED LITTON A HUNDRED MORE TIMES, EACH TIME WE WERE TOLD OUR HOME WAS SOLD! WE TRIED TO SECURE A MORTGAGE FROM SEVERAL OTHER LENDERS, BUT WERE TOLD OUR CREDIT HAD THE FORECLOSURE AND THEY EITHER COULD NOT NEGOTIATE WITH LITTON BECAUSE THEY WERE NO LONGER THE LENDER, OR LITTON DID NOT RETURN THEIR CALLS. Last month, the attorney that handled the motion to quash service sent a letter stating that ONE WEEK following the hearing, Litton claims to have served us with foreclosure papers; and the house was again foreclosed! LITTON NEVER GAVE US A CHANCE TO SECURE A MORTGAGE FROM THEM OR ANY OTHER LENDER AFTER WE PREVAILED IN THE FORECLOSURE COURT. The attorney wants another 3,600.00 to go through the same process in Court and reverse the foreclosure. WE WERE NEVER SERVED ON OCT 27 2008. Not only do we want to sue the process server, LITTON LOAN, and their agents, but more importantly we WANT TO SECURE A REVERSE MORTGAGE FROM A LENDER!!! PLEASE HELP US!

There are lots of other outrageous complaints against Litton there, many as heartbreaking as the one above. Litton Loan Servicing is creating lots of misery in the world, much of it because they just don't seem to care about details, circumstances, ethics or even the law when it comes to dealing with their customers.

And unfortunately the way Wall Street works these days, you can become a Litton Loan customer without intending to if your original mortgage company sells your mortgage to them, as has happened to hundreds of thousands of people.

Also as we can see from this NY Times article on October 13, 2010, Litton Loan Servicing isn't exactly hiring "professionals" to do its business either:

At Litton Loan Servicing, an arm of Goldman Sachs, employees processed foreclosure documents so quickly that they barely had time to see what they were signing.

“I don’t know the ins and outs of the loan,” a Litton employee said in a deposition last year. “I’m not a loan officer.”

And yet this employee was doing loan officer work.

So Litton is using amateurs to process its foreclosures, throwing tons of people out of there homes without cause, charging fees they shouldn't be charging for loan payments that weren't actually late, and claiming people are in default on their mortgages even when they aren't.

And they're getting away with this, as is the company that owns them, Goldman Sachs.

Goldman also owns a substantial part of for-profit education company Art Institute which according to Bloomberg News peddles degrees for up to $100,000 that students later find are "worthless."

So here is this company that has sold toxic financial products that it knew was worthless to customers without telling them while shorting those very same products, owns a loan servicer that is scamming hundreds of thousands of people all across this country and owns a 38% stake in a for-profit education company that offers worthless degrees for as much as six figures that leave students in debt up to their eyeballs but without gainful employment.

Let me ask the question again, how much of the $20 million that Geoffrey Canada and the Harlem Children's Zone received from Goldman Sachs was made from human misery and/or criminal activity?

How much of that money came from somebody who fraudulently lost their house to Litton Loan or had to pay late fees for mortgage payments that weren't actually late?

How much of that money came from students who paid for a worthless degree from Art Institute and are working as strippers or grocery clerks to pay off their loans?

How much of that money came from investors who bought into a Goldman financial product that Goldman knew was worthless and who lost their shirts in the Housing Bubble collapse?

And what does it say about both Geoffrey Canada and the Harlem Children's Zone that they're happy to take the money made from shady foreclosures, fraudulent mortgage fees, garbage college degrees at diploma mill universities, and worthless collateralized debt obligations that were hawked to naive investors as something of value?

The old saying goes that you are what you eat.

The same can be said for non-profit organizations that claim to be doing good in the world.

They are where they raise their funds from.

Given how Goldman Sachs makes its money, Geoffrey Canada and the Harlem Children's Zone ought to be ashamed that they have taken even one cent from Goldman and should give back the entire grant.

Sure Canada can build a new school with that money.

But how many people have had their lives destroyed by Goldman Sachs, lost their homes or their savings to these crooks, in order for Mr. Canada and the HCZ to build that school?

Cuomo Calls For Sacrifice From Unions, Not From Hedge Funds

Happy Labor Day Weekend, union members - it's time for pay cuts and concessions says Little Andy Cuomo:

Andrew Cuomo called on the public employee unions on Saturday to help save the state like their predecessors did during the city's 1970s fiscal crisis.

Cuomo chose Labor Day weekend to tell the Daily News that the union leadership needs the same "spirit of cooperation" displayed in the '70s, one where short-term sacrifice provides long-term security not just for the state but also their members.

While crediting then Gov. Hugh Carey and the Legislature's role in saving the city, Cuomo said the unions played a crucial part by voluntarily agreeing to concessions and investing in city bonds with their pension funds in order to help with the bailout.

"The labor community and labor leaders really led," he said. "Labor leaders next year are going to have to step forward the way they did in the past, take a long view, and work with the state in the true spirit of public service."

Wait a minute - the state ISN'T facing the same crisis as it was in the 70's, taxes are lower than they were in the 70's and yet Little Andy Cuomo is going to cut wages, benefits and pensions of state workers and push layoffs and furloughs to add more money to the state coffers.

What about asking you hedge fund manager buddies to pay actual taxes, Little Andy?

Oh, right - you're on their payroll.

You took $100,000 from John Paulson, the key figure in the Goldman Sachs fraud case.

The hedge fund that manages your personal and campaign cash - EnTrust Capital Inc., - was linked to the NY State pension/illegal kickbacks scandal.

And of course the NY Times reported that your hedge fund pals gave you a suitcase full of cash for your support on "education reform" and charter schools earlier this year.

You are WAY TOO COZY with the hedge fund industry.

In fact, back in 2006 the NY Times reported you were one of the few politicians willing to place your campaign cash into hedge funds in order to maximize your returns.

Newsbusters noted the relationship with concern:

Mr. Cuomo’s experience is a rarity in an arena where most campaigns, focused on their short-term needs, keep their money in conservative vehicles like savings accounts.

Investing campaign money in hedge funds also presents special concerns, government watchdogs say, because of their unregulated nature. Given the secrecy of such funds, who can say, they ask, whether a high return reflects a smart bet or simply a campaign supporter’s efforts to evade contribution limits by padding the return of a favored campaign account.

"There’s no way to know what’s going on with a hedge fund," said Fred Wertheimer, president of Democracy 21, a Washington-based nonpartisan group that works to reduce the influence of money in politics. "The candidate knows, and the hedge fund manager knows, but the public doesn’t."

In Mr. Cuomo’s case, one of the hedge fund’s three founders, his wife and officers of the fund — known as EnTrust Capital Partners L.P. — have donated nearly $175,000 to the last two Cuomo campaigns.

Given your coziness with the hedge fund industry, one wonders just what guarantees they gave you.

Might one have been "Keep taxes and rates and regulations for hedge funds where they are and we will bankroll your campaigns for governor and maybe even president"?

Might another have been "Bust the state unions and teachers unions for us and we'll continue to let you roll around in our cash"?

Judging by how he has taken on unions and teachers already but said nary a word about the crooks on Wall Street or at the hedge funds, I bet I am right on this.

Even if the words weren't said explicitly, the intentions were made pretty explicit themselves.

Screw working people, keep the punch bowl going for the Masters.

Kaplan Crooks

The Washington Post is owned by Kaplan Test Prep.

Kaplan Test Prep is a for-profit education management organization that runs standardized test preparation programs and undergraduate and graduate programs both online and at traditional campuses.

Kaplan Test Prep, like many for-profit education management organizations, is run by crooks.

Don't believe me?

Officials from the Government Accountability Office conducted an investigation of 15 for-profit schools around the country, including two owned by Kaplan, and found “fraud and engagement in deceptive or otherwise questionable behavior" at all the schools.

Specifically here is what investigators found at one Kaplan campus in Florida:

At one college, later identified in congressional testimony as Kaplan College's Pembroke Pines campus, the investigation identified two scenarios where prospective students, who were working undercover for the GAO, were faced with “fraud and engagement in deceptive or otherwise questionable behavior” when inquiring about an associate degree in criminal justice.

In the first scenario reported by the GAO:

* The Kaplan admissions representative falsely stated that the college was accredited by the same agency that accredits Harvard University and the University of Florida.
* A test proctor sat in the room while the applicant took a test and coached her through it.
* The applicant was not allowed to speak to a financial aid representative until after she enrolled.
* The applicant had to sign an agreement to pay $50 a month to the college while enrolled.
* The admissions representative said the applicant should switch from criminal justice to the medical assistant certificate because she could make up to $68,000 a year. But, the GAO said 90 percent of medical assistants make less than $40,000 a year.
* When asked about paying back student loans, the Kaplan representative allegedly told the applicant: “You gotta look at it … I owe $85,000 to the University of Florida. Will I pay it back? Probably not …. I look at life as tomorrow’s never promised …. Education is an investment, you’re going to get paid back tenfold, no matter what.”

In the second scenario, the GAO red-flagged these tactics:

* Two Kaplan representatives refused to answer the applicant’s questions about financial aid, but they debated with him about his commitment level for 30 minutes.
* After first saying the criminal justice program would take 18 months to complete, the representative changed that to two years. The representative then said that student loans would fully cover the program’s cost. Yet, the GAO noted that the applicant would need to take out both federal student loans and private loans to finish the program in less than three years.
* The representative told the applicant that repaying the student loans would not be an issue once he got his new job.
* “Hard sell” marketing techniques were used, such as becoming argumentative, calling the applicant afraid and scolding the applicant for not wanting to take out loans.

The full GAO report can be read here, but the above highlights, showing that Kaplan college employees are no better than sleazy car salesmen looking to make a bottom line sale no matter what and willing to lie, cheat, and berate customers to sign on the dotted line (as they say in Glengarry Glen Ross, "ALWAYS BE CLOSING!!!"), get the point across quite well.

Kaplan, with more than 66,000 students around the U.S., received $211 million in Pell grants during the 2009-2010 school year.

Add in the amount of student loan money Kaplan hands out to students (for-profit colleges received $20 billion in student loans last year) and you realize that there is an awful lot of money the people running these schools are stealing from both students and taxpayers.

And they are stealing it. The USDOE released data last week showing that for-profit colleges have disturbingly low repayment rates for the student loans - especially at Kaplan schools:

Adding new fuel to the growing controversy over regulating for-profit colleges, the Department of Education on Friday released data on student-loan repayment rates at the nation’s colleges and universities, listing the institutions by name.

Although the department issued no analysis or comparison of repayment rates by sector, outside advocacy groups that analyzed the data found that in 2009, repayment rates were 54 percent at public colleges and universities, 56 percent at private nonprofit institutions, and 36 percent at for-profit colleges.

“I think it’s notable that the for-profits are the only type of school where the majority of students are unable to repay their loans,” said Debbie Frankle Cochrane, program director at the Institute for College Access and Success, which has called for tighter regulation of for-profit institutions.

At some for-profit colleges, the repayment rates were startlingly low. For example, 33 of the 86 Corinthian Colleges’ Everest locations had repayment rates of less than 20 percent — and at several, the rates were less than 10 percent.

At the headquarters of the University of Phoenix, the nation’s largest for-profit education company, the repayment rate was 44 percent, compared with 38 percent at DeVry and 27 percent at Kaplan University, a unit of the Washington Post Company.

So Kaplan schools have been caught engaging in fraudulent and "deceptive or otherwise questionable behavior" by government investigators and government data shows that only 27% of Kaplan students can afford to pay back their loans.

They are lying to and manipulating vulnerable people to get them to sign up for classes, then don't care whether people can actually pay back the loans they take out to attend their schools.

Here is how one former admissions officer at Kaplan University described the school and how they "rip off" students in 2007:

I was a Financial Aid Officer at Kaplan University which is owned by the Washington Post(1). My employment was for over a year and I quit to work at a new job. I am not angry at Kaplan yet I am disappointed. The school offers a very expensive education, aggressive enrollment process and a questionable quality of education. They don't seem motivated to educate. They are motivated to make money.

The cost of tuition goes up every year. The price hike usually takes place toward the middle of the year. I believe it is currently 305 a credit hour. This means a 90 credit associate degree costs 27,450 plus fees. A 180 credit bachelors degree costs 54,900. The equivalent ONLINE bachelors degree at the University of Florida is 18,240 plus fees.(1) There are more reputable sources of education available at a much lower cost.

P.S. you will not be eligible for any state scholarships at Kaplan unless you live in Iowa.

The Kaplan admissions telephone sales force is staffed is extremely aggressive. They sit in cubicles and try call 150 people a day or 750 calls a week. They try to get more than 3 students to enroll every month. Once they get a possible student on the line, they will do everything they can to get you to enroll. The telemarketing techniques they use can be very convincing. For example, I have seen people enroll who do not have computer access, don't know how to read or have a mental handicap. Reputable colleges have students calling them not the other way around.

By the way, once you enroll the admissions officers won't talk to you. So don't think they are your friends. You are their paycheck.

Will 55,000 buy you a quality education? Maybe. First, you have to graduate. When I left, the school was running into trouble with retention rates. This may explain why some of their staff are reporting a delay in paycheck payments. I can find graduation rates for other Universities on the web but Kaplan's is mysteriously missing. Perhaps this is a by product of enrolling anyone who will answer the telephone. As for the quality of education, a quick Kaplan search on Rip Off Report will show an extensive list of past Kaplan University students and they are not happy. Receiving a 55,000 education should make them happy.

Indeed, it should.

Yet that would mean that students are actually graduating from the schools and getting jobs with the degrees they received that help them pay off their loans.

Clearly that is NOT happening.

You would think the Washington Post, owned by Kaplan, would be embarrassed by these facts and might actually hold themselves and their company accountable (as they delight in holding D.C. teachers accountable), but you would be wrong.

Instead the Kaplan Test Prep Post attacked Democrats in Washington who have sought to regulate the for-profit college industry and make sure that schools are not stealing from students and taxpayers.

Here's what the crooks at the Post wrote:

THE OBAMA administration is considering rules that could sharply limit the availability of for-profit colleges to American students. The government is right to fashion reasonable regulation to discourage fraud or misleading practices, but it would be wrong to impose rules that remove an option that is especially useful for poor and working students.

Readers should know that we have a conflict of interest regarding this subject. The Washington Post Co., which owns the Post newspaper and washingtonpost.com, also owns Kaplan University and other for-profit schools of higher education that, according to company officials, could be harmed by the proposed regulations.

But our feelings about career colleges, as the for-profits are often called, are consistent with our editorial policy on education more broadly: that is, the more options available to parents and students, the better. Particularly among some Democrats, that's not always the prevailing view. But for the most part it has been the philosophy of the Obama administration, which is why an effort to narrow choice in this area would be inconsistent as well as misguided.

...

In a speech on higher education in Texas this month, President Obama noted that getting more Americans into -- and successfully out of -- college is an economic imperative. "It's an economic issue when the unemployment rate for folks who've never gone to college is almost double what it is for those who have gone to college," Mr. Obama said. "Education is an economic issue when nearly eight in 10 new jobs will require workforce training or a higher education by the end of this decade." But the president noted that in college completion the United States has been "slipping. In a single generation, we've fallen from first place to 12th place in college graduation rates for young adults." He vowed to reverse that trend.

...

But it's difficult to imagine achieving Mr. Obama's goal of 8 million more college graduates by 2020 if the for-profit sector is severely constricted. According to the Career College Association, as of 2006-07 about 9 per cent of the nation's 25 million college students were attending tax-paying schools such as Kaplan or Strayer University, and the number has been growing rapidly. It's been growing because for-profit schools have been adept at meeting the needs of working students who want to advance their careers but can afford to study only part-time and, often, online.

The government has an important role to play in helping to ensure that these students aren't taken advantage of. A recent Government Accountability Office video revealed repugnant instances of misleading and high-pressure recruiting, including by Kaplan employees. It's also reasonable to discourage students from paying for courses that promise but fail to deliver improved career prospects, which is why statistics on repayment of government loans are relevant.

Given that only 27% of Kaplan students can actually PAY BACK their loans, I think it is reasonable to assume that Kaplan schools are failing to deliver improved career prospects and instead are stealing millions of dollars from both students (many of whom do NOT belong in college without remediation and other academic services, as we learned from the former Kaplan admissions officer at Rip Off Report) and taxpayers.

Also, given the sleazy sales tactics and telemarketing scams, Kaplan uses to sign up any prospective student who can hold a pen, it is reasonable to assume Kaplan are not actually meeting the needs of working students but the needs of themselves and their investors.

As for helping students who can only go to school part-time, how about expanding state and city community colleges, which charge a fraction of the tuition that the for-profits charge, rather than provide taxpayer largesse in the form of Pell grants and student loans for the crooks in the for-profit industry?

Ah, but doing that would hurt the bottom line of the for-profit industry and the Wall Street investors who back them (including Goldman Sachs.)

So instead we get self-serving jive from the Kaplan Test Prep Post editors decrying new accountability rules that will force for-profit schools to show that students are graduating with useful degrees that expand their career opportunities and pay them enough to be able to pay back their students loans.

They don't say what kind of accountability measures they would support, only just that

If the data released Friday are used without further refinement, the effect will be to deprive many working students of their best option for higher education -- and to worsen the national problem that Mr. Obama has dedicated himself to solving.

So in other words, pay lip service to accountability and regulation of the for-profits, but DO NOT actually do anything to hold for-profits accountable.

Given how the same editors at the Post (and some of the columnists they have on staff, like Jay Matthews) delight in calling for new accountability measures for teachers but do NOT want to similarly be held accountable, I would have to say that not only are the editors at the Kaplan Test Prep Post crooks, they are also HYPOCRITICAL and SANCTIMONIOUS crooks.