Friday, January 22, 2021
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Justice probe of Goldman goes beyond deals cited by SEC

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is the title of this breaking story which went up on the Washington Post web site at 8:43 EDT this evening. Citing law enforcement sources, the article notes in its second graf:
The Justice Department probe began weeks ago and is essentially on a parallel track with the SEC investigation, the sources said. While prosecutors and investigators are focusing on some of the same mortgage-related transactions as the SEC, the sources said, the Justice Department has cast a wider net.

Further down we read

The U.S. attorney's office in Manhattan and the FBI are conducting the criminal probe, which sources said has been underway for weeks. Sources said a decision on whether to file any charges has not been made.

The Religion of Bilk-For-Greed

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How cathartic to listen to the alpha wolves of Wall Street explain themselves to their servants in Congress. How amusing to watch those servants nip at the heels of their disdainful masters. It is a masters class in gingerly executed subservience-on-a-leash. It is a masters class in bilking.

Bilking, it would seem, the universe, of which the wolves styled themselves The Masters.  Who were the bilkees? Begin with the immediate clients of the wolves, their fellow big investor-firms domestic and foreign,  who likewise imagined themselves to be super-experts in investing, their sophistication so far above the common herd, the sheep, that only they were capable of appreciating the clever, complicated artistry of the instruments peddled to them by the likes of Goldman Sachs, that pinnacle of pinnacles. Next came the customers of the salesmen of those firms, who can be called the running dogs of Wall Street that pretended to be wolves but were a tier or two (or three) down, in among the pack in offices around the globe, who sold these instruments to purchasers like municipal school boards, pension and retirement funds, local governments world-wide, and to individuals everywhere

Time for Strong New Wall Street Regulation

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"I think the market is cleansing itself..." That remark was made recently on CNBC by an apologist for the shenanigans and illegal acts that brought us the financial debacle now unfolding - a spokesman for those who insist that the "free market" can "regulate itself.

The comment totally discounts the disruption in the lives of millions caused by the collapse of the economy, suffering brought about by the rampant greed and manipulation of markets in this latest financial collapse. I wonder...is the market cleansing itself of flash trades...dark pools...unrelenting short selling...problems with derivatives? Can we trust firms like Goldman Sachs to pledge that, never again, will they peddle junk to the rest of us, while their insiders bet that very junk will fail? I don't think so.

It's actually in the best long-term interest of the stock market and Wall Street to be re-regulated. As it stands now, the majority of Americans are rightly convinced that the stock market is rigged, a place where insiders have gamed the system so that they alone are sure to win. Elimination of the practices that brought down the whole economy is vital. Without re-regulation, we are destined to repeat the debacle just endured. The very people who cause the problem are never the ones who pay for it. The rest of us are.

So, as the White House begins the arduous job of selling reform of Wall Street against the headwind of ever-present Republican obstructionism, it might pay for all of us to learn a bit about the insider's gaming of the stock market? Let's look behind the curtain and reveal some of the actions of the greedy Wall Street Wizards of Oz....