Thank the assiduous brilliance of Reuters' star columnist Felix Salmon for tearing away the phony artifice of the coziness between Wall Street regulators and Wall Street. In today's offering Salmon blew me away with his exclusive discovery that the SEC secretly promised Goldman Sachs NOT to prosecute any other notorious ripoffs of the innocent investor in mortgage back securities other than Abacus, the heretofore biggest Goldman black eye coming out of the melt-up before the meltdown. I have to admit the clever Salmon is a must-read every morning at 4:45 AM when his blog is sent about, for he is deft at getting beneath the surface of the financial culture and letting its denizens, including the financial media, get their just desserts. Salmon has a superior supply of word daggers.
The SEC took Goldman's offer of a $550 million fine to cover its sins in the Abacus public offering, which dumped lousy mortgage-backed securities on an unsuspecting public and promised the public that the settlement did not exclude the agency from pursuing fines on other smell-like garbage deals like Hudson and others where Goldman was going mainly short but wanting its public clients to go long the same securities it was shorting. Yet, the SEC quietly told Goldman it was taking the Abacus fine as recompense for all of its sins, a hell of a fine day of fixing the government.
It beggars belief that it took a Freedom of Information Act request to dig up this rotten little arrangement from the recent past. Woulda. Coulda. Shoulda. It is a stark reminder of the message that the US is "driven by such a critical symbiotic and costly relationship "between Wall Street and official Washington," as Nomi Prins underscores in her new book, All the Presidents' Bankers: The Hidden Alliances That Drive American Power.
She writes compellingly: "The most elite U.S. bankers and government officials understand that their positions are mutually reinforcing...the U.S. bank heads retain more influence over global capital than any government, and their unique alignment with the presidency is a force that will fortify America's power...Our choice is simple: either we break the alliances, or they will break us." There is simply no counterbalance to the secret accommodation that goes on every day between the bigwigs of Wall Street and the powers that be in Washington. More Freedom of Information Act investigations please.
Simply stated, we are living under false posturing about the "pretense of financial reform instead of pushing for real reform... Bankers dominate the globe using other people's money, and presidents gain command through other people's votes." This the truth, the whole truth and nothing but the truth of how the nation runs at the top of its power structure.
