Tag Archives: Goldman Sachs

As If Meg Whitman Needed More Help…

Just in case you didn’t know, Meg Whitman has a lot of money.  Her gigantic pile of money includes that she which made from eBay and her little dalliance with Goldman Sachs.  Heck, even Steve Poizner thought it was skeezy.  But, at this point, she doesn’t see any reason whatsoever to stop making every effort to purchase the governor’s gig.  And why not, $104 million is really only a down payment, and it’s just one step away from the White House, her intended destination anyway.

So, she really doesn’t need any added financial resources, but why the heck not?

Days after California’s  political watchdog agency said it would not crack down on issue advocacy ads until after the Nov. 2 election, a business group took aim at Democratic gubernatorial candidate Jerry Brown with a blistering example of such ads.

The Small Business Action Committee, backing Republican Meg Whitman for governor, launched a new television ad attacking Brown’s record on job creation and spending. (SacBee)

Of course, Joel Fox, the leader of this committee is quite supportive of Whitman.  He should be anyway. Just a few days after she paid $10,000 to be on his slate card for the primary, the committee endorsed her. How convenient. Must be good to get the green stuff coming in from Whitman and going out from the big corporations.  And there are cuts to be had at each stop.

Now, I would post there ad, but I think I prefer this Steve Poizner ad about Meg a lot better.

Whitman FAIL: Prefers To Buy, Not Debate

Meg Whitman has lots of money, so she’s been able to buy all the TV time that she would want. Why would she accept debates when she could just buy all that?

Well, that doesn’t mean that she isn’t worried about appearances of rejecting all those debates. So, she’s gone on the offense.

The two have tangled publicly over debates, with both accepting one appearance together. Brown, a Democrat, has challenged Whitman to nine more.

“We’ll look at some of these other debates. But I’ve got to tell you, he is talking about 10 debates. I would be glad if he had 10 ideas to fix California,” Whitman said to applause from the 75-strong audience. (LA Times)

Meanwhile, what are her ideas? Well, I’ll let Arnold Schwarzenegger summarize her “bogus talk.”

He didn’t mention her name, but in brief remarks at the Los Angeles Press Club’s annual awards gala on Sunday night, Gov. Arnold Schwarzenegger swiped at Republican gubernatorial candidate Meg Whitman, calling her proposal to eliminate 40,000 state worker positions “bogus talk” and praising journalists for asking where those cuts would be made.(SacBee)

Whitman doesn’t have the ideas, and that which she has are “bogus.” Sounds about right.  Nonetheless, she’s got money, so the whole Buy It Now Plan is still in operation.

Whitman Can’t Buy Her Way Out of the Goldman Sachs Charges

There was a lot of interesting comments at the GOP debate for governor. A lot of crazy on immigration issues and a lot of magical thinking on budgetary issues.  But that’s for a different discussion. The exchange, and the charge, that is working right now against Meg Whitman is simple. She is a profiteer who put her own personal fortune over the best interests of her company and its shareholders.

I’ll let Steve Poizner break it down for you:

Everytime this clip, or Poizner’s ad, is played, you can practically hear voters turning away from MoneyBags Whitman. She is part of a kleptocracy that thinks they can have what they want, when they want it. They are entitled, and Whitman thinks she’s entitled to the governor gig.  Her staff practically said as much when they demanded that Poizner drop out of the race.

Frankly, I have no favorites in the GOP primary, they are both far too conservative, and would move the state in the wrong direction.  And it is really hard to tell which one is more out of touch with Californians. Could it be the Goldman Sachs billionaire or the man who thought $450,000 homes were the “wrong side of the tracks?”  

It’s a tough call.

Desperate Whitman Reaches for Ridiculous Charges

If you didn’t see the new Poizner ad about Whitman and Goldman Sachs, go check it out right below this post.  You’ll know why Whitman is trying anything to get the glare off of her.  So much so that she will happily make up meaningless charges.

Her latest attack? That Jerry Brown got Oakland into a bad interest rate deal with Goldman Sachs. Except…the deal happened a year BEFORE Brown was in office:

The deal between Oakland and Goldman Sachs – a so-called “interest rate swap” intended to create stability in repaying some of its debts that’s now costing the city $5 million a year – occurred a year before Brown was in office and was a common practice for municipalities around the country to finance bond debts. …

Whitman said Brown showed a “failure of leadership” for failing to pull Oakland out of the deal, though Sterling Clifford, his spokesman, said that Brown had no vote on the issue and no veto power over a decision made by the City Council. Brown also served as president of the Joint Power Financing Authority, which negotiated the restructuring of the interest rate swap, though he had no voting power there, either.

Joe Yew, treasurer for Oakland, said canceling the deal would have cost the city $15 million to $20 million in termination fees.(MediaNews)

Now, I’ve heard once, or a million times, that Meg Whitman is a “business woman with common sense.” So, Ms. Whitman, let’s see if all that fancy business training says about this deal: would you have paid $15 million to cancel a deal that may (or may not) cost the city about $5 million?  A cheat sheet for you, that’s a $10 million loss right there.

But never you mind about that, because there’s a “failure of leadership” there. Not one that Jerry Brown had anything whatsoever to do with, but Whitman has to find something to deflect the glare from her dismal record with Goldman. Basically what she’s alleging is that he made a bad business deal. Of course, it wasn’t Brown at all, but I’m not sure if Whitman really wants to talk about bad business deals.  Tough luck for her, because she’s made many of them.  Take Skype:

Don’t call it a bust just yet, but it’s fair to say eBay executives aren’t thrilled with what they’re getting out of Skype, which the auction king bought for $2.6 billion two years ago.

On Monday, eBay said it would take a $900 million so-called impairment write-down against the value of Skype. This means that eBay has been forced to reassess the value of the Internet telephony company relative to its overall business today. By recording a charge, the company is essentially saying that it has taken a loss on its original investment.(Cnet)

Yeah, that’s right. Whitman was the one who made the ultimate decision to buy Skype for $2.6 Billion.  So, if they are going to point to a standard operating procedure deal with the City of Oakland for $5 million, what are they going to say about a deal that cost her company almost a billion dollars? Does that maker her 200 times more dangerous as the governor?  

But this is all about throwing stuff up at the wall and seeing what will stick.

So far no evidence of conflict has arisen between Brown and his sister. But Whitman continued to assert that because Brown hadn’t addressed the issue himself, there were unanswered questions over his relationship with Goldman Sachs.

“At least you have to explain what happened. As far as I know, he has been completely mum on this subject,” she told The Associated Press. (MediaNews)

Whenever you see that whole “it must be true because he hasn’t denied it” bull you know a candidate is desperate.  So, why doesn’t she address the rumors that I heard about her:

  • Meg Whitman is a sociopath who may possibly have eaten live puppies in Tijuana.
  • Meg Whitman exploited children in vicious labor camps.
  • Meg Whitman raised two sons who were kicked out of many schools, clubs, and Princeton University for hurling racial epithets.
  • Except, wait, those last two really happened, so it probably would be nice for Whitman to try to explain that to the California electorate.  Asking Brown to explain the Goldman charge is no better than asking Whitman why she eats the puppies.

    So, let’s have more talk of Goldman Sachs, please. It’s getting to Team Whitman.

    It’s Time for Meg Whitman to Come Clean About Her Past (and Present) Ties to Goldman Sachs

    It’s no secret that Meg “Wall Street” Whitman served on the board of directors at Goldman Sachs at the same time that the notorious banking giant was engaging in some questionable (and now illegal) business practices. But Whitman hasn’t exactly been open and honest about her direct involvement in the mortgage-backed securities and other shady insider deals that resulted in half a million families losing their homes.

    Now that the Department of Justice has launched a criminal investigation into Goldman’s role in the subprime mortgage meltdown, it’s more important than ever that Whitman disclose exactly what she knew and did during her 14 months on the Goldman Sachs board. That’s why we’re calling on Whitman to provide detailed answers to the following questions (which are central to growing concerns about her fitness to lead our state) during this Sunday’s GOP gubernatorial debate:

      1. Will you admit that Goldman Sachs was wrong to bet that hard-working people would lose their houses, at the same time the company was stacking the deck so innocent families were sure to lose?  Will you publicly rebuke Goldman and the Wall Street culture you were a part of — the same company and culture that made you a billionaire?

      2. Knowing Goldman’s unethical — and potentially criminal – activities drove the mortgage meltdown, will you apologize to the half million California families who lost their homes for your role as a Goldman director and investor who profited from their losses?

      3. California voters deserve to know what kind of judgment you would display as Governor.  Will you come clean with voters right now about what you knew about Goldman’s unethical dealings and when you knew it?

      4. If you are named in a federal criminal investigation or asked to testify publicly about your knowledge of Goldman’s illegal tricks or your profits from the company’s scams, how will you remain focused on California’s concerns over their jobs, education, and health care?

    According to Labor Federation Executive Secretary-Treasurer Art Pulaski:

    The hot water Meg Whitman’s in due to her inextricable ties to Goldman Sachs just hit the boiling point. The people of California deserve the honest truth about Whitman’s involvement in the practices that are being investigated as part of the current criminal probe against Goldman Sachs. Whitman must immediately disclose all dealings with Goldman Sachs – past and present – and divulge any information she has about the alleged criminal activity under investigation.

    Whitman sat on the board of Goldman Sachs in 2001-2002, was engaged in now-illegal insider deals with Goldman Sachs that netted her nearly $2 million in profits, and currently holds a myriad of investments with Goldman worth millions of dollars. Whitman has repeatedly dodged tough questions about her involvement with Goldman, and recently has attempted to distance herself publicly from the firm.

    For more information about Whitman’s shady past with Goldman Sachs, visit www.WallStreetWhitman.com

    Steve Smith is communications director of the California Labor Federation, which represents 2.1 million workers in 1,200 unions across the state.

    Paid for by the California Labor Federation. Not authorized by a candidate or committee controlled by a candidate.

    This is the eMeg Ad We’ve Been Waiting For

    Ok, this is it. This is what we have been waiting for. The ad that hits at Meg Whitman, and ties her for all the world to see to Goldman Sachs.  And the ad comes courtesy of Steve Poizner.  

    At this point, I feel like I should be giving money to Poizner’s campaign to get this ad up on the TV as much as possible.

    See, the thing with Whitman is that there is just so much meat for an opposition researcher.  In addition to the Goldman Sachs stuff, there’s the child labor issue, her brilliant purchase of Skype (a nearly billion loss for eBay), and putting toxic glue in your kid’s Stride Rites.  Chris Kelly (no, not the AG candidate) went ahead and wrote your Meg Whitman bible.

    Go Poizner, go! You just have to love a bloody Republican primary between two uber-rich techies, don’t you?

    California Labor Federation Launches Campaign to Expose Meg Whitman’s Wall Street Agenda

    Meg Whitman spent last week crisscrossing California with her Wall Street pal Mitt Romney, pumping up her already overflowing campaign coffers with even more corporate cash. Her campaign strategy is clear: write big checks and avoid a real conversation with voters about her background, her policies, and her plans for the state.

    But California’s workers aren’t going to let Meg and her Wall Street agenda take the express jet to the Governor’s office. While Meg and Mitt were rubbing elbows with the corporate elite, an army of nurses, educators, construction trades workers, and others who would be directly impacted by Meg’s anti-worker agenda were putting the final touches on our campaign to expose her plans to do Wall Street’s bidding and what her Governorship would mean for California’s families.

    Today, the California Labor Federation launched a massive grassroots campaign massive grassroots campaign that will deploy an army of volunteers to expose the truth about Meg Whitman’s Wall Street agenda and her history on the board at Goldman Sachs. The campaign will counter Whitman’s avalanche of TV ads and estimated $150 war chest with online tools as well as and person-to-person contact, which is proven to be the best way to reach voters.

    The brand-new website www.WallStreetWhitman.com will bring the pieces of the grassroots campaign together online. Serving as a one-stop information hub that exposes the truth of Whitman’s Wall Street agenda for California, www.WallStreetWhitman.com will also enable worker activists to engage others in the campaign through extensive use of email and social networking tools like Facebook and Twitter.

    Union voters represent about 1 out of every 5 voters who will go to the polls on Election Day, and many millions more share the same concerns about what Meg Whitman’s agenda will mean for their families. Our plans to reach millions of member voters and deploy tens of thousands of volunteers to speak to their like-minded friends, neighbors, and co-workers will be critical to defeating Meg Whitman’s agenda, which includes plans to fire 40,000 public employees, roll back critical consumer protections that protect our healthcare, and take away worker’s rights, to name a few.

    Meg Whitman’s wants to corporatize and downsize the California economy, which will be disastrous for everyone who works hard for a living in California – whether they are union members or not, whether they work in the public sector or the private sector. While Meg’s campaign is fueled by her allegiance to Goldman Sachs and the Wall Street culture that destroyed our economy, our campaign is powered with the passion of tens of thousands of workers who are determined to build better lives for themselves and their children.

    We’re ready to spend from today through Election Day getting out the truth about Whitman’s record and letting voters know exactly where she stands on the issues they care about, including jobs, health care, education, and workers’ rights. Join us at www.WallStreetWhitman.com.

    Steve Smith is communications director at the California Labor Federation, which represents 2.1 million workers in 1,200 AFL-CIO and Change to Win unions across the state.

    Paid for by the California Labor Federation. Not authorized by a candidate or committee controlled by a candidate.

    Charles Schwab Makes The Mistake Of Telling The Truth

    Maybe it’s because their headquarters are on Montgomery Street in San Francisco instead of Wall Street in New York, but Charles Schwab Co. is telling investors that California is not about to go out of business.

    In a rhetorical question-and-answer missive to investors, Schwab income planning director Rob Williams, says “California has severe financial problems, but we think it’s unlikely that the state will default on its general obligation (GO) bonds.”

    Then he lists five reasons for reaching that conclusion, including constitutional guarantees; the fact the state can’t file for bankruptcy, and the fact that “states can’t just disappear.”

    So does the firm see the state’s current travails as “a buying opportunity?” “No one can say for certain,” says Williams.

    Here’s the document.  As Williams says, general obligation bonds are guaranteed by the state constitution, and only education is ahead of paying off these bonds.  Here’s a sample:

    Many analysts point out that the state’s revenues are collapsing, its spending is out of control, and the structure of government prevents the state from ever being fiscally stable. Are these concerns valid?

    All of these statements may be true, depending on your political view. But these troubles don’t inevitably translate into default on California GO bonds, for all of the reasons cited above.

    However, they do translate into serious concerns for other parties interested in the state’s solvency-of which there are many. The politics of the situation can also be noisy, leading to steady reporting of the budget drama and ebbs and flows in market sentiment, likely adding to uncertainty and reducing confidence among investors. As confidence drops, the prices of outstanding bonds drop, and yields rise.

    The situation has also resulted in changes to the state’s bond rating, including a downgrade by Fitch Ratings to BBB on July 6 and Moody’s to Baa1 on July 15. These ratings are two and three notches, respectively, from “junk” bond status. The rating is also on negative “Rating Watch,” meaning that the rating will remain on review for additional downgrades “if institutional gridlock” persists.

    While ratings alone should not drive an individual investment decision, comments in Fitch’s rating report are worth quoting: “The BBB rating indicates that expectations of default risk remain low, although the rating is well below that of most other tax-supported issuers. GO debt in California has a constitutional prior claim on revenues, although after education.”

    In other words, diving into Fitch’s rating report, they essentially admit that their rating is bullshit.  They are dropping the ratings because of perceptions of crisis that don’t match constitutional obligations.  This is gouging.  It’s almost the textbook definition of it.

    And if you don’t think that goes on, check out this investigative report from last November:

    Goldman, Sachs & Co. urged some of its big clients to place investment bets against California bonds this year despite having collected millions of dollars in fees to help the state sell some of those same bonds.

    The giant investment firm did not inform the office of California Treasurer Bill Lockyer that it was proposing a way for investment clients to profit from California’s deepening financial misery. In Sacramento, officials said they were concerned that Goldman’s strategy could raise the interest rate the state would have to pay to borrow money, thus harming taxpayers.

    “It could exaggerate people’s worries about our credit,” said Paul Rosenstiel, head of the public finance division of the treasurer’s office.

    That’s exactly what’s happening.  The big banks are sparking irrational worry over California’s ability to repay bonds to increase their yields.  The federal government needs to step in with a backstop, not just to save the state money, but to prevent the commission of a crime.

    Meg Whitman: Maths Iz Hard: UPDATED Arnold Enjoys Meg Math

    UPDATED at the top, as the Governor lays off 5,000 state workers, the perfect thing to get California working again.  He’s basically borrowing from the Whitman playbook here.  See below for why that’s crazy.

    It’s a long way until the 2010 Governor’s race, but I think Calitics needs to do our part in pointing out that Meg Whitman is frequently full of crap.  She’s seized on this idea that California’s problems can merely be solved by firing all the state employees.  Now, first of all, California has the second-lowest rate of state employees per capita in the entire nation, a conveniently forgotten fact by eMeg and the rest of the swinging corporate raiders in the Yacht Party.  Next, as Josh Richman explains:

    “We haven’t looked hard enough at where we can cut. We can lay off 20,000 to 30,000 state employees while prioritizing public safety and teachers,” Whitman told the Long Beach Chamber of Commerce. “We shouldn’t have to lay off teachers, we need to lay off bureaucrats.”

    Fact is, “cut the bloated bureaucracy” has been a GOP rallying cry for decades, and yet whenever the study, the audit or the blue-ribbon commission report comes back, we’re suddently talking about far less “waste, fraud and abuse” than they’d implied. Is there some fat to cut? Sure. Should we? Probably. Will it fix this deficit? Not even close.

    The budget deficit now looks to be about $21.3 billion; it would be about $15 billion if voters approved Propositions 1C, 1D and 1E next week, but that almost certainly ain’t gonna happen. And $21 billion isn’t 30,000 jobs, as George Skelton so eloquently put it back in February:

    According to the state budget document, there is the equivalent of 205,000 full-time jobs controlled by the governor. There actually are more workers than that because some are part-time. Do the math based on 16 months, since that’s now the time frame of the projected deficit, assuming a balanced-budget package could be implemented by March 1.

    You could lay off all those state workers – rid yourself of their pay and benefits – and save only $24.4 billion.

    Meanwhile, you would have dumped 160,000 convicted felons onto the streets because all the prisons were closed after the guards and wardens were fired. There’d be no Highway Patrol because all the officers were canned. State parks would be closed because there were no fee-collectors or rangers.

    Truth is the savings wouldn’t even add up to $24.4 billion because some of those employees are paid out of small special funds that are self-sustaining.

    If these people were in an empty trash bin, they’d still clamor to “cut the waste.”

    Let me again commend Chris Kelly’s Meg Whitman week on the Huffington Post, he’s doing an oppo research job that should practically ensure him a spot on any number of campaign staffs.  I particularly like the part detailing the $1.78 million she stole from Goldman Sachs, which for all I know might make her a folk hero.

    Next year oughta be fun.

    …by the way, I’m not letting other Yacht Party gubernatorial hopefuls off the hook either, like Tom Campbell.  He predictably dissembles about California’s low per-pupil spending on K-12 education, making the same debunked “hey, the schools have plenty of money” claim that Dan Walters likes to peddle.  Allow me to introduce them both to Julia Rosen circa April 2008, which by the way is before the even deeper cuts to schools made in the February budget agreement.

    …And if you want to laugh, read this “we’re winning, and the fact that everyone makes fun of us PROVES it!” op-ed from Whitman senior adviser Jeff Randle.

    Goldman Sachs to California: Here’s Betting You Fail!

    The LA Times and ProPublica have quite the story on Goldman Sachs today.  According to the Times, while they were selling the bonds as California’s investment banker, they were also arranging bets against the bonds.  The bets, while common in today’s market, could increase the interest rate California pays:

    Goldman, Sachs & Co. urged some of its big clients to place investment bets against California bonds this year despite having collected millions of dollars in fees to help the state sell some of those same bonds. The giant investment firm did not inform the office of California Treasurer Bill Lockyer that it was proposing a way for investment clients to profit from California’s deepening financial misery.

    *  *  *

    “That’s not a good way to do business,” said Geoffrey M. Heal, professor of public policy and business responsibility at Columbia University. “They’ve got a conflict of interest and they’re acting against the interest of their customers. . . . You act in the interests of your clients. You don’t screw them, to put it bluntly.”(LAT 11/11/08)

    While it’s not easy to pin down how much our interest rates were affected by these little Goldman Sachs gambles, the sheer size of our bonds mean that we are playing for big stakes.  We have billions of dollars of bonds, and small increases in interest mean millions of additional dollars go to interest.

    And nobody would have known a thing about this had the Times and ProPublica have nabbed a version of a prospectus marked “Proprietary and Confidential.” (On a side note, ProPublica is quickly growing into a very important portion of the media. The model of a non-profit doing investigative journalism has some merit.)

    While it’s not cool to screw your customers, you can hardly blame institutional investors for betting against a long-term resolution in California’s budget mess. We’ve been dealing with this since Arnold chopped the Vehicle License Fee, and the 2/3 rules make it darn tough to create any long-term solutions.  However, we still have a lot going for us here in a solid basis in new technology and a history of innovation.  Here’s hoping we make those who bet against us pay up.

    UPDATE: I should have pointed out, as Robert did in the comments, that Goldman is taking money from the bailout program. I suppose this is what we get, huh?