When Warren Buffet invested $5 billion into Goldman Sachs everyone took that as a sign that if he had faith in GS then that just demonstrated how good that company really was. But when Goldman Sachs started getting into trouble and he came prancing out in its categorical defense I got a sinking feeling in my stomach that Mr. Buffet might very well be THE man behind the curtain at the Emerald City.. That other oracle, Alan Greenspan was just a foil… Darth Vader to Warren’s Palpatine if you will…
When the news broke that he was fighting the regulation of derivatives I new for sure that he’s been turned to the Dark Side. This is the man who coined the phrase “Weapons of Financial Mass Destruction” to describe the financial instruments that he has since loaded up on to the tune of $63 billion, no doubt at the insistence of his buddy Lloyd B. over at Goldman’s.
Paul Farrell is a 70s Wall Street veteran.. A lot of people think he’s flown the coop. I do not. He’s of Buffet’s generation so I take his shock and dismay with the mess the World is heading into quite seriously.
Here is his take on the situation:
Buffett defends Goldman, joins greed Conspiracy
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Read how America has become a Banana Republic With No Bananas.
I’ve been wondering for months how come Americans are not marching in the streets with pitchforks and torches, ready to burn down Wall Street.. Apparently that time has come…minus the pitchforks and torches..for now…
After reading “The Sickening Abuse Of Power At The Heart Of Wall Street” from Simon Johnson, chief economist at the IMF from 2007 to 2008, it is no stretch of the imagination to presume that more protests will follow… It will make the Tea Party seem like small potatoes… America might finally be awakening from its Reaganomics Bushite Induced Coma… but is it too late?
Things I read this weekend are making it look like the S.E.C. suit against Goldman is the tipping point, the Avalanche control mortar that has set off the entire ridge. Things are moving fast. For weeks there’s been tons of speculation on whether or not the U.S. Senate was going to get bogged down into the same fillibuster blackmail scenario that dragged the Health Bill through lawmaking hell… And then with the flip of an S.E.C. switch, overnight, it became apparent to the G.O.P. that there was no way they could possibly get away with siding with the banking industry. So now it seems that a financial regulation bill is on its way and it might even include a break-up the banks amendment.
What is clear is that the Oligarchy is scared. If Goldman loses it’s legitimacy there is no telling what might happen to it. Is it really too big to fail? Or has it become too big to be allowed to exist?
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Goldman Sachs is being accused of securities fraud by the S.E.C. for selling an investment product that was secretely designed to fail. For anyone following the debate on how to sanitize the U.S. finiancial system this is a very interesting and exciting news.
See here for the Bloomberg report. And here for the New York times story. No big surprise that markets reacted badly.
I’m curious to see if this will begin a bear run or not. The SEC must be confident that its evidence is incontrovertable as they must have known that stocks would take a hit. So be it. No doubt 10 million unemployed Americans are chearing tonight as they cash in their foodstamps for yet another candlelit KD dinner.
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