The SEC’s Dangerous Gamble – The Daily Beast
Posted April 22, 2010on:
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The Daily Beast has an interesting story on the SEC vs Goldman saga today. (In fact they have several if you are interested .)
The problem with litigation is losing. But even if the SEC prevails, its reward may prove ephemeral.
But to quote Jimmy Breslin, in suing Goldman Sachs, the SEC “received immediate lacerations of the credibility.” This begs the question why, considering that this SEC litigation takes it places it hasn’t been before—
• challenging the premier firm of Goldman Sachs,
• about a synthetic derivative transaction,
• on which Goldman lost millions of dollars,
• where the parties were sophisticated and not in obvious need of SEC protection,
• after a year-and-a-half investigation,
• filed immediately after the President threatened vetoing financial reform legislation that doesn’t strongly regulate derivatives,
• and a few hours before release of the Inspector General’s Report on SEC inadequacies in attacking Alan Stanford’s Ponzi scheme,
• but apparently without giving Goldman advance notice of the filing,
• or exploring possible settlement, and
• splitting 3-2 along political lines in a major enforcement action.
More significantly, it comes when the SEC is badly in need of “unlacerated credibility.” Since January 2009, the SEC has done an admirable job of laying a solid foundation for restored credibility. But, its suit against Goldman could undo much—if not all—of that effort if the litigation doesn’t turn out satisfactorily, and even if it does, if reports about dissension and political splits are accurate.
Now I do not want to imply that this SEC Saga isn’t important because it is and it has a great deal to do with just how the Obama Fanatics take over of the financial sector of our economy will come down. If the bill that our infamous Senator Chris Dodd wrote isn’t curbed considerably then that sucking sound you will hear screaming off to Asia, and Hong Kong in particular, will be our largest financial institutions. When they go they will of course take all their beautiful job creating money with them.
No, this story is important. BUT, it is also a smoke screen for what the other hand is doing as have been all of Obama’s crisis and scandals. The other hand in this case is working overtime to slip thru the VAT or Value Added Tax. This is a tax on every buying American. it is a hidden tax because it is just added into the cost of the product so no one realizes exactly how much they are paying in tax. This of course makes it real easy to raise the VAT tax rate anytime the government needs a little more money.
It also means lowering American living standards to European levels. Yes, I did say lowering American living standards to European levels. Not many Americans are aware of just how much higher our standards of living are than Europeans on a comparable income level until we visit friends or relatives in Europe or have them visit us here and have them comment on things that we take for granted. That, or thinking their American relatives are really much more “well off” than they actually are!
At any rate regardless of Senator McCain’s non-binding vote taken in the Senate with 85 Senators saying they would not vote for a VAT, a VAT is in our future.
The above referred story however is interesting in explaining the situation with the SEC vs Goldman saga, but also in pointing out that the Democrats are really biting the hand that feeds them since Democrats have received much more in campaign funds from Wall Street than have Republicans. After all it was Democrats Representative Barney Frank and Senator Chris Dodd (among others) who have made it possible for Wall Street to make the unreal profits they have been able to make over the past few years that led to the Financial Crisis which was really a Mortgage Crisis. Money was made on Wall Street by playing fast and loose with the mortgages given to people who could not afford them which was because Frank and Dodd made it government policy to pressure banks to make these bad loans. Well, the banks did and got their profit and then sold the mortgages to Fannie Mae and Freddie Mac when they were huge PRIVATE mortgage companies. This then left Freddy and Fannie holding the bag when the foreclosures started coming down but no worry Wall Street bankers and the big Democrats campaign donners were off the hook and it was already decided in the dark rooms of Congress that the government (TAX PAYERS) would buy out Freddy and Fannie and make them government or PUBLIC agencies with buy outs possible forever (just like the Post Office!).
Moral of story: Wall Street knows it is more lucrative to buy off the crooks in congress, and the Democrats seem to hold the title for having the most crooks. BB