How Clinton’s benefactor cashed in on the crash

Back in 2006, Donald Trump said he was sort of looking forward to the coming housing crash, because he could cash in—presumably by buying up distressed properties.

However, Trump didn’t do anything to cause the housing crash.   In contrast, Hillary Clinton’s benefactor and social friend, Lloyd Blankfein of Goldman Sachs, not only benefited from it, but helped to bring it about.

His firm bought up subprime mortgages.   That meant lenders could make “liar’s loans” they knew would never be paid back, and eliminate their risk by selling them to Goldman Sachs.

Goldman Sachs converted the mortgages into securities, like stocks or bonds, and sold them on the open market.   They got rating agencies to label the securities as high quality investments, even though Goldman Sachs management knew they weren’t.

They made other investments based on the assumption that the market would crash and the securities would become worthless.

Other Wall Street companies did similar things, but Goldman Sachs was a leader.  All this seems like financial fraud to any normal person, but the Obama administration decided not to prosecute.

All this happened when Lloyd Blankfein was CEO of Goldman Sachs.  He became CEO in 2006 and before that was chief operating officer.

Goldman Sachs has given Hillary Clinton $675,000 for making three speeches, and husband Bill Clinton $1.55 million in speech fees.

The firm’s employees as a group are among the top five contributors to Hillary Clinton’s campaigns.

Goldman Sachs also hosted the Clinton Global Initiative; the video above shows a picture of Hillary Clinton and Lloyd Blankfein at a CGI meeting.

How likely is it that a Clinton administration would prosecute Goldman Sachs officials for financial fraud?  How likely is it that a Clinton administration would bring financial malpractice under control?  The likelihood is next to zero, in my opinion.

∞∞∞

For the record, I don’t think Donald Trump, who has his own corrupt business ties, would be better.

LINKS

Clinton and Goldman: Why It Matters by Simon Head for the New York Review of Books.

2008 Crisis Deepened the Ties Between Clintons and Goldman Sachs by Nicholas Confessore and Susanne Craig for the New York Times.

Hillary Clinton Won’t Say How Much Goldman Sachs Invested With Her Son-in-Law by Lee Fang and Henrik Moltke for The Intercept.

Tags: Financial fraud, Goldman Sachs, HIllary Clinton, Housing Crash, Lloyd Blankfein, subprime mortgage crisis, Wall Street, Wall Street crash