Finally, somebody is insisting on bringing some reason and accountability into the whole financial markets mess. Here's what G/S did, essentially, as reported by AP/HuffingtonPost's Ryan McCarthy:
The Securities and Exchange Commission announced Friday civil fraud charges against the Wall Street powerhouse and one of its executives. The agency alleges Goldman failed to disclose that one of its clients helped create -- and then bet against -- subprime mortgage securities that Goldman sold to investors. In essence, Goldman is accused of pushing a mortgage investment that was secretly devised to fail. . . .Any 10 year old should be able to see that this is wrong, wrong, wrong. This is why these large financial institutions should not have these multiple roles and why deregulation allowed it all to happen.
"The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen," finance expert Sylvain R. Raynes told the New York Times about such deals. "When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else's house and then committing arson."
People must be held accountable. It is no comfort to know how much influence former Goldman Sachs officials now have in our economic policy making.
Ralph
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