Are Washington's claims against Goldman Sachs politically motivated?

[Melensdad]

Friday we saw many Commodities and Stocks plummet in price. They fell in reaction to actions taken by the Obama Administration claims/allegations against Goldman Sachs investment firm. The Democrats have been touting a need for dramatic shifts in banking/financial regulations. So now we've had a dramatic claim, and a dramatic drop in many investment portfolios, is that enough to scare politicians into supporting new regulations?

Is this a manufactured crisis? The wording clearly lays the blame of the housing/mortgage bubble/crisis on the feet of the banks, despite the fact that banks were required to make loans under the governments mandate via the C.R.A. laws.

Wall Street suspects Goldman charges 'not coincidental' to financial reform effort
http://www.nypost.com/p/blogs/thespread/wall_street_suspects_goldman_charges_KE4YoDNxaxrZFSkHea0MqI
2:16 PM, April 16, 2010 ι By KAJA WHITEHOUSE

Wall Street is more than a little suspicious of today’s charges by the Securities and Exchange Commission, which has accused Goldman Sachs of lying to investors about who was really behind junk mortgages securities it sold to clients.

Barclays banking analyst Roger Freeman comes right out and blasts the SEC effort as “a well-timed, and perhaps not coincidental, effort to sway some on-the-fence Republicans” to get tough on financial reform.

“Targeting GS, given the flurry of anti-Wall Street press that has centered around that firm, offers the publicity that the administration needs at this critical juncture,” Freeman says in a note to clients today.

He says Senate Finance Committee Chairman Chris Dodd has targeted a vote on the Senate bill for April 26, “and given the short span of time between now and the end of the month, we are not surprised to see the stepped up support for the bill.”​

And then this one:

Obama: Fresh crisis without new financial rules
http://apnews.myway.com/article/20100417/D9F4QH4O0.html
Apr 17, 8:24 AM (ET)
By DARLENE SUPERVILLE

WASHINGTON (AP) - The U.S. is destined to endure a new economic crisis that sticks taxpayers with the bill unless Congress tightens oversight of the financial industry, President Barack Obama said Saturday.

The overhaul is the next major piece of legislation that Obama wants to sign into law this year, but solid GOP opposition in the Senate is jeopardizing that goal.

"Every day we don't act, the same system that led to bailouts remains in place, with the exact same loopholes and the exact same liabilities," Obama said in his weekly radio and Internet address. "And if we don't change what led to the crisis, we'll doom ourselves to repeat it. "Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again," the president said.

A proposal that Senate Democrats are readying for debate creates a mechanism for liquidating large financial companies to avoid a meltdown.

For the first time, the government would regulate derivatives, those financial instruments whose value depends on an underlying asset, such as mortgages or stocks. Derivatives can help hedge risks. But derivatives can produce steep losses, or huge profits, if the value of their underlying asset sinks. The proposal also would create a council to detect threats to the financial system and set up a consumer protection agency to police people's dealings with financial institutions.

On Friday, Obama promised to veto the bill if it doesn't regulate the market for derivatives, which contributed to the nation's economic problems after their value plummeted during the housing crisis. But Democrats haven't agreed on how far such regulation should go, and all Senate Republicans are united against the bill. That opposition complicates Democratic efforts to get the 60 votes necessary to overcome likely GOP procedural roadblocks.

Republicans contend that a provision creating a $50 billion fund for dismantling banks considered "too big to fail" would continue government bailouts of Wall Street. Obama administration officials say such a fund is unnecessary and they want Senate Democrats to remove it.

Obama criticized financial industry interests for opposing the proposed regulations and for waging a "relentless campaign to thwart even basic, commonsense rules." He repeated his call for Republicans and Democrats to work together to overhaul the system but made it clear that Democrats are prepared to go it alone.

"One way or another, we will move forward," he said. "This issue is too important."

 

[muleman]

And if nobody goes to jail the same old stuff will go on!

 

[grizzer]

Obama is demonizing and manufacturing another crisis to help break the 41 GOP filibuster against the bill.

He's had 15 mo to bring charges so timing is absolutely political.

The bill also has no penalties against Moodys, S&P, etc that rates the financials...

 

[loboloco]

And if nobody goes to jail the same old stuff will go on!

The politicians or the traders?

 

[waybomb]

This is all a politicsal ploy via Saul Alinsky. Demonize somebody for political gain, so more power can be had. It's a security trade. quote: "For a synthetic CDS (or any other synthetic security) there is a buyer and seller. These are negotiated transactions. Of course the buyer expects them to perform and the seller expects them to underperform. Let me give an example. If I were to wager with a friend on the upcoming UFC fight ALDO vs FABER. Jose Aldo (16-1) -350 vs. Urijah Faber (23-3) +260 If i bet on Aldo should i be suprised that my friend bet on FABER? Of course not, if he didnt there would be no bet In a ZERO sum transaction/game , how do you take one side without expecting someone to take the other side? "

 

[RobsanX]

I don't think the timing is coincidental at all. Financial crisis, SEC pulls their thumb out, SEC finds fraud. It follows a logical chain of events.

 

[fogtender]

The term is "smoke and mirrors". When you are innocent, you sceam that you didn't do it. When you did do it, you scream it is everyone else's fault...

These guys are blaming someone that congress should have been regulating, but were too busy getting kickbacks and bribes to look too closely.

Elect all of the A$$e$ out of office....

 

[300 H and H]

Regulation of the derivatives market should have been done long ago. No one was trackiing the money or how it was being "bet". And this is just Las Vegas style gambling, in the end. But because it was unregulated, there was no way to know how much of a problem it was developing....If you cann't see or hear the buse coming, you fail to get out of it's way. We all got run over because of a failure of the regulatory agencies to regulate this market. They should have done it years ago, but the politicians were and are being bought off to stop them from doing so.

It time for some real change in washington DC. It is high time to throw all the bumbs out like foggy says. Remember them on election day, no matter what party they are from. A clean sweep in congress. They haven't been doing their jobs, (to busy arguing to get real work done) so it's high time to fire the whole bunch of loosers, and take away their benifts that are better than the general publics, as they go home. Time for them to get a real carrier and a real job. Professional poloticians.....they need to get a real life, and we can give it to them, by voting them out. Enough of my rant............

Regards, Kirk

 

[waybomb]

If there were no sub-prime loans as driven by democrats, there would be no CDO/CDS issues. CDo/CDS work fine in a market devoid of forced bad loan issuance.

 

[darroll]

The ole buy a home with no money and no job is still alive and well.
Thank you Barney Frank.
Then they cry when the brokers unload this worthless paper and make money doing it.
Get em, Goldman Sachs.
Then people wonder why the world is in a deep recession.
If your in denial, Blame Bush.
Oh Bush saved me because he gave the American people a warning, I listened.