The SEC's civil fraud allegations against Goldman Sachs continues to have political reverberations. The SEC contends that Goldman Sachs created a purposefully toxic mortgage security with the help of a big hedge fund client (John Paulson), who netted a billion dollar profit betting against the security. As POLITICO's "Morning Money" reports, "The 140-year-old firm's executives believe they are 'a prop in a campaign' for Wall Street reform, and say they plan to continue expressing confidence 'after a sucker punch' by focusing on clients, who they believe are largely sympathetic."
Goldman Sachs Chairman and CEO Lloyd C. Blankfein and other executives will appear April 27 before Sen. Carl Levin (D-Mich.), chairman of the Permanent Subcommittee on Investigations (Homeland Security and Governmental Affairs Committee), for a hearing on "The Role of Investment Banks" as a series on "Wall Street and the Financial Crisis."
Can the Obama administration and congressional Democrats gain politically by going after Goldman Sachs? Can they create the perception that congressional Republicans' opposition to the Dodd financial reform bill is part of an unholy alliance with the big banks and financial institutions?
Also, based on information public now, did John Paulson do anything wrong in helping Goldman allegedly bet against the housing market? Didn't he have his own financial "skin in the game?" If the housing market continued to rise he would have lost billions instead. Doesn't a free market system need naysayers willing to be against rising financial bubbles? - Politico Story
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OBAMA and Bernanke are featured in a movie I just saw on Sunset Blvd.-- about greedy hedge funds called "Stock Shock." Even though the movie mostly focuses on Sirius XM stock being naked short sold nearly into bankruptcy (5 cents/share), I liked it because it exposes the dark side of Wall Street and revealed some of their secrets. DVD is everywhere but cheaper at www.stockshockmovie.com
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