Goldman Sachs Execs Lauded Profits From Housing Market Collapse

VOA News. E-mails released Saturday show executives of the U.S. investment bank Goldman Sachs boasting about making money by betting against risky subprime mortgages as the U.S. housing market was collapsing in 2007.

In one of the e-mails, which were released by a U.S. Senate committee, Goldman Sachs Chief Executive Lloyd Blankfein said the company lost money on the mortgages - but made more than it lost by taking a so-called short position on the mortgages.

Short positions are bets the market will go down.

The emails were released as Blankfein and other Goldman Sachs executives prepare to testify on Tuesday before a Senate committee investigating the origins of the financial crisis.

Goldman Sachs said Saturday the Senate committee unfairly released only four emails from almost 20 million pages of documents provided by the company.

Earlier this month, U.S. financial regulators filed suit against Goldman Sachs, accusing the company of assembling a package of mortgage investments intended to fail, and selling the security to investors without warning them of the dangers.

Goldman Sachs has vigorously denied any wrongdoing and has vowed to defend its reputation.

Obama: Wall Street Reforms Still Urgently Needed

"And that is how, after two very difficult years, we will not only revive the economy, but help to rebuild it stronger than ever before," said President Barack Obama.

U.S. President Barack Obama says reforms are urgently needed in the financial industry, to prevent a repeat of the crisis that devastated the nation's economy. The Senate is debating a financial overhaul bill.

In his weekly address Saturday, President Obama says reforming the financial system is a necessary part of the country's economic recovery.

"After a recession that stole eight million jobs, this is going to take some time," he said. "And this will require that we continue to tackle the underlying problems that caused this turmoil in the first place.  In short, it is essential that we learn the lessons of this crisis, or we risk repeating it."

The U.S. Senate may debate financial reform legislation in the coming week.  The Senate Banking Committee on Wednesday passed a bill which would end taxpayer bailouts of big banks and protect consumers from abusive financial practices.

The House of Representatives approved similar legislation in December.

The president's radio and Internet address follows his Thursday speech near Wall Street in New York, in which he argued for new laws to protect consumers and hold financial firms accountable.

Mr. Obama says it is necessary to end taxpayer bailouts of private companies and make financial deals more transparent. "That is how we will restore trust and confidence in our markets," he said. "That is how we will help to put an end to the cycles of boom and bust that we have seen.  And that is how, after two very difficult years, we will not only revive the economy, but help to rebuild it stronger than ever before."

In the opposition Republican Party's weekly address, Senator Kay Bailey Hutchison says the Democrat-sponsored Senate bill would not end government bailouts, and Republicans want to continue negotiating.

"It is time for Democrats to put away the political playbook and simply say publicly what they are suggesting privately: that this bill still needs some work, that both parties should come together to do that work on behalf of the American people,"  she said.

While President Obama is promising an end to government bailouts, he says those which have occurred over the past two years have helped prevent millions of people from losing their jobs.

Mr. Obama says the U.S. auto industry has added 45,000 jobs since General Motors emerged from bankruptcy, and Chrysler has reported a profit for the first time since the economic crisis began.  GM says it will repay billions of dollars in U.S. and Canadian government loans five years ahead of schedule.

Also, the president mentioned Friday's U.S. Treasury Department announcement that the bailout of some U.S. industries will likely cost less than $90 billion, down from the original estimate of $500 billion.

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U.S. stocks refresh 18-month highs on strong new home sales

NEW YORK -- The U.S. stocks refreshed 18- month highs on Friday after a government report showed new-home sales surged last month.

The U.S. Commerce Department reported on Friday that sales of new homes jumped 27 percent in March, bouncing off a record low in February. It was the best month since July and the biggest monthly increase in 47 years.

The housing data helped shares recover from early losses. Stocks opened slightly lower on Friday morning after Greece requested aid from the European Union (EU) and the International Monetary Fund (IMF).

The Greek government formally requested the activation of a joint EU-IMF rescue plan after soaring borrowing costs were seen making it virtually impossible for the debt-strapped nation to meet its funding needs on the open market.
The U.S Commerce Department reported on Friday that demand for U.S.-made durable goods dropped for the first time in four months as orders for new aircraft plunged 67 percent.

However, orders excluding the volatile transportation goods actually made the biggest gain since December 2007 when the U.S. economy slipped into recession. Analysts believe that this showed the strength of the economic recovery.
In earnings, Honeywell International Inc. said on Friday its first-quarter earnings fell to 393 million U.S. dollars, or 50 cents a share, compared to 399 million dollars, or 54 cents a share, in the year-ago period. Sales rose 3 percent to 7.8 billion dollars.

The Dow rose 69.99, or 0.63 percent, to 11,204.28. The S&P 500 rallied 8.61, or 0.71 percent, to 1,217.28 and the Nasdaq composite index gained 11.08, or 0.44 percent, to 2,530.15.

World economy now in phase of rebuilding: IMF chief

International Monetary Fund First Deputy Managing Director John Lipsky, International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn and Egyptian Minister of Finance and Insurance Youssef Boutros Ghali (L-R) give a press conference after the International Monetary and Financial Committee (IMFC) meeting in Washington D.C., capital of the United States, April 24, 2010.

WASHINGTON -- The chief of International Monetary Fund (IMF) said on Saturday that the world economy is now in the phase of rebuilding and all countries should implement financial reform in a coordinated way.

IMF Managing Director Dominique Strauss-Kahn made the remarks at a press conference held after the meeting of the International Monetary and Financial Committee, the policy-setting body of IMF.

He said the world economy has experienced the phase of panic, the phase of action and the phase of relief.

"And now, I think, we are entering the fourth phase ... is clearly the phase of rebuilding," said Strauss-Kahn, voicing optimism toward the global economy.
But he also noted that the global economic recovery is unbalanced, in which Asia grows faster while Europe and Japan lag behind.

Strauss-Kahn said advanced economies are facing challenges of high unemployment and burden of debt, and capital inflows pose risks for emerging economies.
He called on every country to cope with these challenge in a cooperative and coordinative way.

Strauss-Kahn said IMF will focus on reform in the global financial sector and reform on quotas and other governance in itself.

Asia leads global economic recovery for first time: IMF

WASHINGTON -- The International Monetary Fund said Saturday that for the first time ever Asia is leading the recovery from a global economic crisis.

"Asia's faster recovery relative to the rest of the world seems to mark a break from the past," Anoop Singh, director of the Asia and Pacific Department at the IMF, said at a press conference.

"Although GDP growth in Asia has exceeded that of advanced economies over the last three decades, this is the first time Asia is leading a global recovery," he said.
Singh said that in all previous global downturns Asia's contribution to recovery was lower than that of other regions.

He also pointed out that Asia's recovery this time has not only been driven by exports, but also by resilient domestic demand.

Finance ministers, central bank governors and economists from more than 180 countries were expected to attend the spring meetings of the IMF and the World Bank on Saturday and Sunday in Washington.

Sovereign credit crisis, exit strategies from stimulus measures and increasing quota shares for emerging economies were the main issues to be discussed in the meetings. 

Former U.S. SEC attorney gets 8 years in prison for role in stock scam

HOUSTON -- A former U.S. Security and Exchange Commission (SEC) attorney was sentenced to eight years in prison on Friday for his role in penny stock scams.

Phillip Offill, 51, a former Dallas attorney and SEC trial lawyer, was convicted by a jury earlier this year on 10 counts of wire fraud and conspiracy.

He was the last of 11 men targeted in a broad investigation which dealt with the manipulation of share prices for small companies, most with North Texas connections, according to a report of the Dallas Morning News.

Offill had been with the SEC for 15 years, responsible for bringing civil cases against white collar criminals, the report said.

IMF committee vows to strengthen financial regulation

WASHINGTON, April 24 (Xinhua) -- The International Monetary Fund (IMF)'s policy-steering committee on Saturday pledged to redouble efforts to strengthen financial regulation.

"Problems in the financial sector were at the heart of the recent crisis," said the International Monetary and Financial Committee (IMFC) in a communique issued after a meeting here.

"Strengthening financial regulation, supervision, and resilience remains a critical but as yet incomplete task," it said. "We agree to redouble efforts to forge a collaborative and consistent approach for a stable global financial system that can support the economic recovery."

Speaking to reporters at a press briefing, IMF Managing Director Dominique Strauss-Kahn said that the countries had "a strong sense of the need for stronger demand for coordination and more work together" on financial reform.

The IMF has been asked to prepare a report on assessing the state of regulatory and supervisory reforms, he said.

On Thursday, the IMF chief set three key areas for the reform by the end of the year: rules on financial sector liquidity and capital, the toolkit for addressing systemic risks, and the framework for cross-border resolution issues.