Let’s Beat Up On Goldman Sachs

The left-wing Obama administration and the left-wing Gordon Brown administration in the United Kingdom are using the Wall Street investment firm Goldman Sachs as a football. It looks like they are having fun kicking it around and these leftists are hoping that they can stoke populist outrage to improve their sinking political fortunes.

The AP reports:

Brown, currently facing a tough re-election battle, seemed additionally angry at Goldman Sachs’ plan to pay 3.5 billion pounds ($5.4 billion) in bonuses as reported in British newspapers.

“I am shocked at this moral bankruptcy,” he said on BBC TV. “This is probably one of the worst cases that we have seen.”

Brown called for a “new global constitution for the banking system” that would, among other things, ban bonus packages like the ones planned by Goldman Sachs.

The U.S. charges against Goldman Sachs relate to a complex investment tied to the performance of pools of risky mortgages. In a complaint filed Friday, the Securities and Exchange Commission alleged that Goldman marketed the package to investors without disclosing that the pools were picked by another client, a prominent hedge fund that wanted to bet the U.S. housing bubble would burst. Within months, most of the mortgages had been downgraded as the U.S. housing boom went into reverse and the securities fell sharply in value.

LUKE SAYS: While Goldman Sachs must battle with the government’s civil fraud charges, it must also fight to retain client confidence.

Goldman Sachs has been the most successful of the investment banks in dealing with the credit crunch and recession of 2007-2009. Now Obama is using this case to rebuilt the Democrats political fortunes.

The AP reports:

The Securities and Exchange Commission’s bombshell civil fraud charge against Goldman has tarnished the Wall Street bank’s already bruised image, analysts say. It could also hurt its ability to do business in an industry based largely on trust.

Damage from the case could hit other big banks as well. The SEC charges are expected to help the Obama administration as it seeks to more tightly police lucrative investment banking activities.

Goldman has denied the SEC’s allegation that it sold risky mortgage investments without telling buyers that the securities were crafted in part by a billionaire hedge fund manager who was betting on them to fail. A 31-year-old Goldman employee is also accused in the civil suit that was announced Friday.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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