Goldman “Sideshow” Hyped To Push Through Obama Banking Reform

From http://www.infowars.com/goldman-sideshow-hyped-to-push-through-obama-banking-reform/

Goldman “Sideshow” Hyped To Push Through Obama Banking Reform






Steve Watson

Prisonplanet.com

Tuesday, April 27th, 2010

Financial experts are in agreement that the Goldman Sachs fraud revelations are being artificially hyped in Washington in order to force through president Obama’s financial regulatory reform measures, proposals that will not punish bigger banks like Goldman and will not protect the American people from the banking cartels at the centre of the economic meltdown.
On Sunday The Securities and Exchange Commission’s (SEC) investigative office announced that it had opened an investigation into whether the charges against Goldman were politically timed.
“At your request, we have opened an investigation into the serious allegations that you describe in your letter,” Kotz wrote to Rep. Darrell Issa (R-Calif.), the ranking Republican on the House Oversight and Government Reform Committee.
The SEC stated it will seek documents and conduct interviews to determine if their is any weight to the notion.
Congressman Issa described the situation last week, noting that there was a “long list of coincidences” that needed to be investigated:
Obama and the Democratic leadership have denied that the Goldman case has anything to with their reforms, however, financial experts disagree.
Wayne State University Law School professor and former member of the SEC’s enforcement division, Peter Henning told Bloomberg News earlier today that the Goldman case is a “sideshow”, noting that “What’s going on today in Washington is really part of a larger legislative puzzle, and that is pushing through the financial reform.”
The SEC case revolves around allegations that Goldman constructed a financial instrument based on mortgage-backed securities that was designed to fail, without disclosing that hedge funder Fabrice Tourre, who helped build the instrument, had bet on its failure.
Insider emails released by Goldman at the weekend, showing executives bragging about making profits by betting against the mortgage market in 2007, provided more evidence.
Both Tourre and Goldman CEO Lloyd Blankfein have today denied the charges against them at the Senate hearings in Washington.
Goldman is no doubt guilty as sin of large scale fraud, however, as commentators such as Mike Whitney have pointed out, the timing of the whole affair stinks to high heaven with the market having reached a 12 month high and the economy showing signs of improvement.
Furthermore, other major Wall St Investment banks including JPMorgan Chase, Merrill Lynch (now part of Bank of America), Citigroup, Deutsche Bank and UBS were all doing similar deals to Goldman.
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Goldman’s dodgy deal is though to have cost around $1 billion, yet the so called “Repo 105″ ruse at Lehman Bros., amounting to $100 billion, has resulted in zero subpoenas, indictments or criminal prosecutions.
The only discernable difference between Goldman and these other banks is the level of government ties it shares.
Goldman Sachs is “a political organization masquerading as an investment bank, and they’re sitting at the table with the top people in government,” says Goldman critic Christopher Whalen, the managing director of Institutional Risk Analytics, which rates banks and provides customer analytics. He calls Goldman “the most political firm on Wall Street.”
Goldman is also the most hated and notorious bank on Wall St. If the government wanted to garner widespread support for it’s reforms, it could do no better than demonizing Goldman in the eyes of the public.

The case has certainly served as a perfect talking point for proponents of government reform. Senior White House adviser Lawrence Summers and Sen. Christopher Dodd, D-Conn. have both underscored the need for the Senate to adopt Obama’s financial reform in the wake of the case.
As critics have consistently highlighted, Obama’s regulation proposals do not go after the big banks, rather they target traditional community banks, exempting most of the investment bank and broker dealer activities that were responsible for the financial collapse.
Again, as Mike Whitney explains:
Obama’s position on the main issues– “Too big to fail”, OTC derivatives, off-balance sheet operations, securitization, ratings agencies and CFPA–hasn’t changed at all. Wouldn’t that be the logical place to start if Obama was serious about cleaning up Wall Street and reforming the system? Instead, all of the attention is focused the headline-grabbing slapdown of Goldman? Sorry, it doesn’t pass the smell test.
Instead Obama’s reform seeks to create a huge new bureaucratic oversight body, the Consumer Financial Protection Bureau, in order to “protect” the American consumer.
As Ron Paul and others have tirelessly pointed out, there are already regulatory bodies that are supposed to do that in the shape of the STC, the SEC and the Federal Reserve – it was the abject failure, and/or unwillingness, of those bodies to protect the consumer that led to the huge financial meltdown to begin with.

Senator Dodd’s own reform bill would empower the Federal Reserve with more regulatory authority over other banks, financial firms, insurance companies and even smaller lenders. Obama has championed Dodd’s bill, while completely ignoring legislation such as Ron Paul’s Federal Reserve Transparency Act, that would put the onus on the regulatory body to be frank and open and act in the interest of the consumer.

The Goldman case is being used as a political ploy to force through legislation that will ultimately protect the very banking elites that engineered the financial crisis for vast profit and power. When inevitable popular support results, the public will unwittingly be aiding the further expansion and centralisation of those that caused the meltdown.