Wednesday, April 28, 2010

News: Goldman case: First Senate hearing

PBS Show video we saw this morning about how Goldman make it's profits analyzed by Wall Street Journal

Paul Solman: So you mean Goldman Sachs borrows money from the Federal Reserve at a tenth of a percent, a quarter of a percent, takes that money, invests in US Treasury securities at 3.5%, 4%
DAVID STOCKMAN: 3.5%. Exactly.
Paul Solman: And they make the money just…
DAVID STOCKMAN: On the spread.
Paul Solman: and the money is simply being re-circulated from the Fed back to the Treasury?
DAVID STOCKMAN: That’s exactly right.
WSJ - PBS Show Probes ‘Government Sachs’

Also, Business Insider shared with us the first Senate hearing:

2:38: THIS IS A BIG DEAL. TOURRE AT FIRST SAYS THAT ACA "ONLY USED HALF OF PAULSON'S SUGGESTIONS." Then he backtracks and says that Paulson selected a "small percentage," then his colleague (Birnham?) corrects him. Then he says, he doesn't remember the percentage that was recommended by Paulson. Then he says it was "more than a few."

It's a big deal because ABACUS was marketed as "selected by ACA." This could factor in later.
Read all hearing and comments here: BI - Goldman Gets Grilled, First Up To Bat Is Fabulous Fab

Also remember that you can solve all your questions about Goldman's case at our Goldman's Timeline post.

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