It
is gratifying that the SEC and Congress are holding Goldman Sachs feet to the
fire and have effectively downgraded its reputation to junk status. It is equal
gratifying that the F-word – fraud - is being leveled at Goldman (and hopefully
other financially institutions) for their outrageous behavior. The cesspool of
complex sub-prime mortgage investments has sunk our nation and indeed the world
into mountains of debt.
However,
it is not enough for Congress to skewer Wall Street’s pre-eminent investment
house, but to demand criminal indictments of its senior staff for bilking
millions of Americans from their retirement funds and homes. Goldman’s own
email aptly described one of its underwritten transactions as “one sh…ty deal”.
It
is frightening that the assets of the six largest banks earnings are a whopping
60% of our gross domestic product. Congress shares much of the blame for the
free fall in the economy. The democratically led Congressional committees
demanded that banks issue liar loans, loans that were unsupported by financial
assets to advance their low-income housing objectives.. The rating agencies
also deserve a failing grade for
granting AAA ratings for worthless bonds.
It
is unsurprising that the approval rating for Congress is at an all-time low. No
doubt Wall Street banks will be dolling out huge amounts of money to the
outstretched palms of lawmakers to weaken or mute legislation to control their
trading activities.
No comments:
Post a Comment