Wall Street WARZONE

Obama Charges Goldman With Fraud: Political Move Attacking Wall Street’s Big Donors Bolsters Dodd’s Financial Reform Bill, and Two-Term Presidency!

by Paul B Farrell, JD, PhD
| | 4/20/2010

Finally, Obama’s SEC is going after Wall Street’s “too-political-to-fail” banks, ironically some of the biggest campaign donors and lobbyists that put Obama in the White House. Ah, sweet revenge, biting the hand that feeds you! The Journal says Goldman, ”one of the few Wall Street titans to thrive during the financial crisis,” is now ”charged with deceiving clients by selling them mortgage securities secretly designed by a hedge-fund firm run by John Paulson, who made a killing betting on the housing market’s collapse.” He’s off the hook because hedgers have no disclosure duty to investors.

But it’s the other Paulson, Hank, the former U.S. Treasury Secretary, that should be worried. Why? Earlier Bloomberg reported that back in August 2006, the new Secretary privately warned the White House: “Over-the-counter derivatives [were] an example of financial innovation that could, under certain circumstances, blow up in Wall Street’s face and affect the whole economy.” Yet even at the last minute in 2008 Paulson was misleading America that they were “contained.” They weren’t and he knew it.

We saw this coming a year ago in our MarketWatch column about suing Goldman Sachs for RICO racketeering activity. Yes, we’ve been nudging Obama’s White House and the SEC for a long time. Here’s some more background on Goldman from my earlier columns:   

Even Jack Bauer can’t stop ‘The Goldman Conspiracy:’
10 reasons Wall Street has absolute power over America’s democracy (April 20, 2009)

The ‘Goldman Conspiracy:’ RICO? Or Medal of Freedom?
Vote: Racketeers to be indicted or revolutionary American heroes? (April 28, 2009)

‘Goldman Conspiracy:’ Bogle’s ‘pathological mutation?’
Machinations on Wall Street, in government give rise to 13-episodes (May 4, 2009)

Cheers for King Henry — world’s greatest nudger
Goldman Sachs “owes” Paulson a $1 billion bonus (July 20, 2009)

Goldman’s new ‘American Socialism Manifesto’
8 ways ‘The Conspiracy’ is destroying our American democracy (August 4, 2009)

But this fraud suit against Goldman is just the tip of the iceberg, expect more banks to share Goldman’s pain, even the former Secretary’s legacy is under attack. Bigger question: Politically you have have to wonder, will this chase away more of Obama’s supporters? The Wall Street lobbyists’ are turning against him, the “GOP Tea-Party of No” did long ago, and so have many independents … or will this guarantee he’s a two-term president?

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