More Goldman

Just in case I misstated the matter yesterday, it was the personnel of Goldman that gave Obama nearly a million dollars (about $2000 shy of the total).  The Center for Responsive Politics also stated that Goldman employee gave about $5.9 million in the 2007-2008 cycle, including all state and federal election races. Seems about right? And this does not include the PAC money that went to the DNC which also went to Obama's race. And 3/4 of all Goldman donations went to Democrats, as did the majority of donations by other money center banking staff. Wall Street provided Obama with 3 of his 7 largest sources of direct donations.

Let me digress ... Of the top five candidates in terms of money received from Goldman staff, four are Democrats. Part of that list includes Sen. Charles Schumer (D, NY) whose list of committees is in part:

• Committee on Finance
  
  • Subcommittee on Health Care
  • Subcommittee on Taxation, IRS Oversight, and Long-Term Growth
  • Subcommittee on Social Security, Pensions and Family Policy
• Committee on Banking, Housing, and Urban Affairs
  
  • Subcommittee on Housing, Transportation, and Community Development
  • Subcommittee on Financial Institutions
  • Subcommittee on Securities, Insurance and Investment
• Committee on the Judiciary
  
  • Subcommittee on Administrative Oversight and the Courts
  • Subcommittee on Antitrust, Competition Policy and Consumer Rights
  • Subcommittee on Crime and Drugs
  • Subcommittee on Immigration, Refugees and Border Security (Chairman)
  • Subcommittee on Terrorism, Technology and Homeland Security 
  
  Let me see, money to support a POTUS that will institute a revolving door for Goldman staff to the highest levels of United States executive positions ... check. Money to Senators on the Senate Committees for Finance, Banking and Judiciary ... check. And people wonder how the SEC intention to sue Goldman got out early?
  
  Back to Goldman, Obama and the SEC.... The SEC 's suit filed on April 16 alleges the firm failed to tell investors in a 2007 collateralized debt obligation that hedge fund Paulson & Co., which planned to bet against the CDO, helped select the underlying assets. Goldman, of course, denies any such intentional deed, according to Greg Palm, the Co-General Counsel for Goldman. The thing is, in a civil suit you don't need to prove beyond reasonable doubt ... you only need to show by a preponderance of the evidence that the allegation is true and you're done.
  
  Goldman, clearly knew that this "house of cards" (quote from a Goldman trader in charge of constructing and selling this poop) was about to "collapse." Given that knowledge -- and the fact Goldman sold almost all of their holdings of CDOs, unlike the other banks that got caught hold this toxic sludge and which bankrupted or nearly bankrupted our financial system -- it is hard to state that you did not intentionally mislead anyone. You can't just hide behind caveat emptor and expect that to hold water: (1) Goldman knew that the ratings were voodoo; (2) Goldman knew that the underlying securities were toxic junk, they had a hand in creating or selecting them; (3) they knew that Paulson & Co., a hedge fund was getting ready to short the stuff as soon as it was created and sold.
  
  By selling something with an AAA rating, you are saying to the world that "its investment grade stuff." If you don't really believe that, then your disclosure should read "Moody's and Fitch have their heads up their collective asses and it should really be rated BB-." You can't just hide behind a rating that you KNOW is fictitious. This is really no different than an offering circular failing to disclose that a company's plant is built on the next PCB dumping ground. Sure, the institutional investor that buys it may be "sophisticated," but "reliance" is exactly that. For better or worse, if you knew that the reliance was misplaced, you had a part in the commission of a fraud.
  
  So how does the Obama-Goldman connection profit here? There HAS to be a hook. Yesterday I offered some ideas, but I suspect the real plan will reveal itself in the near future.
  
  
  P.S.  Biden is out there ranting and raving about not letting Republicans upset their plans to fundamentally reform finance .... Here at a Brookings Institution Forum,  in a speech about restoring the prosperity of America's middle classes.  He promised "new rules for derivatives that bring the light of day into that shadowy risky market," and measures designed to limit the systemic risk of interconnected banks "dragging down the market" again.
  
  Among other things, the bill would end the practice of hiding "opaque derivatives in invisible accounts" so investors "can once again receive clear transparent price signals they need in order to function efficiently," Biden said.  Since neither Biden nor any member of Congress would  know a derivative if it jumped up and bit him on the ass, I wonder who is going to draft all this transparency legislation? My guess ... ex-Goldman staffers.  All that cap and trade trash? Designed and crafted by ex-Goldman personnel. Which money center bank is tooled up to reap the profits from the scheme ... yah.
  
  The horrible thing is that Americans, without a reliable source of news and any insightful analysis will believe this crap from Biden and Obama. Nauseating. Simply nauseating.