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Is the White House, SEC, and DNC Colluding to Destroy Goldman Sachs to Pass Financial Reform?

By: Erick Erickson (Diary)  |  April 19th, 2010 at 06:35 AM  | 

RESIZE: AAA

Few people are fans of Goldman Sachs on either side of the aisle these days, but FamousDC is raising some seriously troubling questions about the level of collusion between the SEC, White House, and DNC to get Financial Reform passed.

This is serious stuff. Just ask yourself what the reaction in the media would be if the Bush White House had done this.

In a nutshell: The SEC announced its charges Friday morning. At 10:38 a.m. the New York Times breaks the story. 28 minutes later Organizing for America sends out an email from Barack Obama calling on people to support Financial Reform.

Right after that, the New York Times released a massive story going after Goldman Sachs. By the afternoon the DNC has its Google Ads up tying the Goldman Sachs matter to Financial Reform.

This is stunning. Let’s not forget that Goldman was a top donor to Obama in 2008.

Read this entire time line. It is pretty scary how the White House is using the full arms of the government, including quasi-independent government agencies, and outside interest groups to create bad guys with which to pass ever creeping socialist reforms that will continue to cripple innovation in this country.

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COMMENTS

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  • Jack_Savage

    Every business who did not care to stand up to these thugs, or worse yet, SUPPORTED these thugs like Goldman did, will get what they so richly deserve. This Stockholm Syndrome that big business is in the midst of needs to end, and soon, and this should be a perfect wake-up call.

    The best part of this is that crony capitalist Warren Buffet, who still believes Obama is “the man for the job”, is taking a hell of a haircut. Not down to the price he paid for Goldman because of his inside information, but a haircut nonethless.

    We know that there are no longer any rules. It will be that way for the next two and half years at least. Obama will turn us into Venezuela soon enough, it’s just pleasant to see his supporters feel the guillotine while we are all on the way down.

  • NeoKong

    Why wouldn’t you believe it.
    That’s his M.O.
    Smear smear smear.
    Obama’s axelrod led corrupt media propaganda team will go after anybody they are told to go after.
    They will push any media theme and bury any story that hurts him.
    If there is one thing The Obama White House knows how to do it is how to network.

    Obama always attacks his enemies in public before he moves against them.
    Look what happened when a few CEO’s were saying that Obamacare was going to cost them millions and billions.
    Waxman was going to drag them before Congress.
    He only retreated on that because he would have ended up looking like a fool.
    Look at the way he strong armed the secured investors in GM and Chrysler to back off on their claims in a bankruptcy.
    He even tried to go after Fox News and private citizens because of their blistering criticism.
    Nothing is a coincidence with this guy.

  • Xasteius

    Will John Q. Public see it as such?

  • spepper

    Q: “Is the White House colluding…..”? A: Do ursine creatures defecate in arboreal environments?

  • http://www.erickerickson.org Erick Erickson

    It’s a matter of the White House creating a villain to pass its agenda and coordinating the government, the media, and outside political interest groups to get it done.

  • cousinfromanotherplanet

    Obama goes against your script that he’s in the pockets of Wall St and particularly Goldman Sachs so you turn on a dime and create a see through piece of conspiracy nonsense trying to distract your followers from noticing that the meme you’ve been pushing for 18 months has been proven the fabrication it has always been.
    Funny.

  • smitch61

    Everything in this administration is done deliberately, good posting, and we know from the past that a good crisis should not be wasted. Unless the GOP can take control of this issue and explain to the American people what is really going on, than I am convinced this too shall pass with the poll numbers in high support.

  • mustango

    Merrill Lynch will be in the dock right alongside them:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a_vJB04lghjc

  • NeoKong

    A big RedState fan are ya’…?
    What’s your screen name at the DKos ?

  • 6eorge Jetson

    in the wake of all the convenience store robberies that occurred in 2007.

    Goldman Sachs and (again) big Democratic donor John Paulson allegedly broke the existing law in 2007.

    I haven’t gotten around to reading the details of the proposed bill. Like most things in life, the devil’s in the details. “Too big to fail”, I’m against that. But not with a cure that’s worse than the disease. (Implicit govt takeover/power grabs.) But I won’t comment about the specifics until I know more.

    But I will ask, what new regulations would Obama propose in regards to the Goldman case? That all regulations be printed in scarier fonts?

  • smitch61

    I spent many years employed in the mortgage sector, with big name companies that were a pleasure to work for.

    In a nutshell, the Lenders never fought back. They knew the truth and were certainly in a position to do so.. We waited and waited and waited.. Certainly they would fight back right? I mean that is what we all thought anyway.

    They never did… In 2007 and into 2008 most of the laid off Americans were employed in the mortgage sector, it spurred the unemployment rate to what it is today. The media never reported that issue.. Since late 2006, 381mortgage lenders have gone out of business taking hundreds of thousands of workers with them.

    They should have fought back, never did, and have helped to set the stage for the rest of this mess..

  • gamechange11two

    Yet once again the evil corporations are the cause of ALL that is wrong with the world, and only HE has the solution to save America. Of course, his proposal enjoys “wide bipartisan support” too. He has a lot of faith in his playbook. He has to. It only has one play. This is getting too old.

  • cousinfromanotherplanet

    Not a fan of them either, two wrongs don’t make a right…I’ll repost the first para of my first post here.

    Please welcome a new progressive who has come to wade in your waters and debate with you. I assume that you like to hear other points of view and will no doubt enjoy jumping all over me, although I hope your masters have more faith in your convictions than those over at NewsBusters who barred me a couple of years ago the minute I made a point that some conservatives agreed with.

    FYI If you want to know a little of what a real progressive thinks – here are some links to sites I do approve of;
    On the media – http://www.dailyhowler.com/index.shtml
    General politics – v. unhappy with Obama generally – http://correntewire.com/
    Policy – http://www.epi.org/
    On various matters constitutional particularly torture -[ http://glenngreenwald.blogspot.com/ (old site now at salon a pay site)

  • jccbin

    instead of using all its influence to be made whole in the AIG collapse. They thought they were pulling one over on the whole world, I guess, and believe that their good buddies in powerful places would not only protect them, but continue to collude to ENrich them as they have for perhaps decades.

    I do not want Obama to do this, but the populist in me says Goldman should have ALL its assets seized and divided amongst the taxpayers.

    That’s how much Goldman deserves destroying.

  • cousinfromanotherplanet

    to blame for the mess we’re in. They don’t earn enough money,have way too much influence in politics even going so far as employing other poor people to lobby daily for their policy preferences, they set prices for consumer goods and manipulate manufacturers with their huge spending power, welch off the state by extracting welfare payments and live like royalty, and never pay tax (except payroll and sales and sate and city but these don’t count) and instead hide all their food stamps in offshore tax havens. Bad poor people.

  • antisocial

    Remember he did the same with doctors before healthcare. To pass the agenda these are mere tactics. Big business will always work with any government. Whether Socialist or Capitalist. They are in it for money. They can extract advantages by using political influence. They might end up being screwed in the end. That is what history has taught us.

    I am betting nothing is going to happen to GS. At least not in short term.

  • antisocial

    Don’t kid yourself. With regulations all businesses except these major players will be impacted.

    History has seen this story before. This is replay.

  • cousinfromanotherplanet

    I assume anitsoicla that you apply your title – ALL THE OUTRAGE IS FOR SHOW” to Erickson as well as Obama..

  • 6eorge Jetson

    this reader thinks you won’t last long.

    I’m guessing that the lack of social skills you display with your language had a lot to do with your banning at NewsBusters. Lose the disdain.

    This is a private site. It’s not your turf. RedState welcomes respectful debate from Lefties who can stick to the issues. Engage in language like the above, and we’ll soon see a banning.

  • antisocial

    The ones that are “rightful owners” and are being exploited by Evil Corporations?

  • 6eorge Jetson

    Read what you wrote again.

    The founders created a framework of laws to guide us.

    I think what Goldman did is reprehensible. But it is entitled to due process and if found guilty/liable, fined in accordance with existing processes.

  • cousinfromanotherplanet

    I’m online on my high speed broadband connection on my expensive lap-top with time on my hands to debate with my cousins and I even ate arugula and goat cheese for breakfast on my croissant.

    What are you asking anti?

  • cousinfromanotherplanet

    right of the right? And please don’t deny that abrasive language is to be found all over RedState..personally I respect the eloquent political vitriol of the 18th century more than the pc speech of today. But I will never personally insult or swear even if I call out commentators I think are wrong in strong terms.

  • Common_Cents

    Notice how one guy was named, he’ll be the fall guy and Goldman will get a fine, obaamao will get financial control, oops I mean reform.

    Also SEC usually let’s the accused party know ahead of time before a public announcement, not this time.

    Meanwhile Judd Gregg says the timing is curious but he hopes to get a rational bill. Rational? What are you smoking?

  • gamechange11two

    if it’s reform he wants, there’s plenty in DC to keep him busy for the next 928 days. Social security: broke. Medicare: broke. Fanny/Freddie: broke. And all run with nothing but the holiest of intentions, right? And how is running the media like his own ministry of truth going to feed the poor? Perhaps this president could shine that light on the mess that endless regulation has created, and at least take some responsibility for the systemic rise in unemployment that it causes. Offshore tax havens? Try offshore manufacturing economy. Welch off the state? Try institutionalized underclass that gets fed the first of every month. Never pay tax? Try 49% of the voters now. You should show alittle more gratitude to those who make your welfare state possible and stop trying to kill the last rich person.

  • RealQuiet

    Absolutely Erick. Just watching the MSM the last two days and particularly this morning, NBC Today’s Show openly thought that the Goldman Sachs issue would push financial reform through. Just a coordinated effort to create another crisis so big government can come rescue the day. We’ve seen this tactic since Henry Paulson used it to save Barack Obama’s candidacy for president after McCain pulled ahead. Wait….isn’t Paulson from….Goldman Sachs? I smell smoke and I see mirrors here :)

  • banzaibob

    Members of the French Revolution also faced the guillotine because of the feeding frenzy after the king was removed. Let this be a lesson to any wealthy potential donor to leftist politicians that as soon as your usefulness is over you will be thrown to the wolves.

    Vive la revolution.

  • janis

    Which sockpuppet of his do you listen to? Rick Ellenberg or one of the other guys? Nobody much cares to know what a real progressive thinks, we’ve been subjected to that particular black hole for years now. People like you just can’t resist blabbering about what you think and what you feel and what you purport to believe. But to come here and list THOSE sources for your beliefs? Talk about a daily howler….

    We have no masters at RedState, we are a free people here. And there’s no debating a progressive, real or otherwise, because they do not deal in reality, only in theoretical reality. That never works.

  • 6eorge Jetson

    See my posts, for example. Guilty as charged.

    When you go into your neighbor’s house, you can be a wise guy as you refer to the “masters” of the house as long as you’re tolerated. But at some point, the editor is going to run out of tolerance seeing his pages turn into pissing matches.

    For example, this exchange has nothing to do with the topic.

  • banzaibob

    Lets see the government,

    Has a ponzi scheme called Social Security
    Prints money it doesn’t have
    Borrows money from potential secuirty threats such as China
    And continues to finance Fannie Mae and Freddie Mac.

    Obama and Congress should get their own house in order before they tackle someone elses problem.

  • Next93

    I’d take the time out of my day to answer your points, if I thought you really were here to debate, and not just to spray smart-a$$ remarks like this in order to make youself feel superior to us knuckle draggers.

    I’d love to debate you on the role of the poor (or, more accurately, the Democratic politicians pandering to them in order to buy votes with taxpayer money) in screwing up the country, but not while you’re channeling Saul,

    As soon as you indicate that you’d like to engage in intelligend debate, I’d be glad to take you on. If you want to engage in insult comedy, I’d rather spend my time watching old Don Rickles videos on YouTube.

  • throwback59

    Health Care Industry in order to pass Health Care Reform?

  • texasgalt

    At any rate he was in at about $52. I would guess he is well hedged to protect his 300% profit.

    Goldman is dirty but has actually come out for Dodd’s reform.

  • penguin2

    in its purpose of promoting Republican/Conservative causes and candidates. Isn’t really useful for us to have lefties come here to promote their agenda and take slaps at us. You have already shown you are not here in good faith……

  • texasgalt

    Goldman is a bad actor. It is all orchestrated.

    This is risky for Obama. If the market, which is already hugely overbought, takes a serious tumble teh One has lost his best argument. . . almost his only argument.

  • jccbin

    I said populist. I meant populist. I also said I didn’t want it to happen. I was enjoying a moment of schadenfreude. However:

    Not all destruction and reclamation of ill-gotten gains is “gasp! Communism!” Goldman has had its wee hands in the pants of our government for a loooong time. It is not alone in that. And that is one reason we have Progressives in power today.

    The exact depth of the crimes (if any) will never be known because the financial system is blacker than any military black ops, thanks to the impenetrable Fed.

    This government is no longer trustworthy. The “due process” system is no longer trustworthy. That pretty much ends this government in my opinion.

  • http://moelane.com/ Moe Lane

    …for their left kidneys, then use the rest to fuel our SUVs. Which are made out of minorities.

    Just… shoo.

  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

    rule by a King or Oligrachs given that Paulson and Geithner used TARP and Fed funds to save Goldman, now they find them useful as villians.

    BTW, I am not very keen on insider trading cases anyway given the vague nature of the law in this area, and my recent immersion in SEC law with my new partner here in ATL is not disabusing me of the notion.

    But I do think that the case against Goldman is about more than just this financial regulation bill. It is also about the ongoing thuggery that sicks pitchforks against those that would stand up to Obama.

    more later

  • Jack_Savage

    But we are beyond the point of suspecting coordinated attacks like this, using the full power of the federal government. That is a given with these thugs.

    I find it funny that despite the tributes paid to the Obama regime, Goldman is being sacrficied for the Greater Good. I also find it funny that other big business types who were prescient enough to pick Obama and jump on board are now shaking in their boots.

    Who’s next?

  • Martin Knight

    PS: You’re not here to engage in debate because you’re obviously too much of a self-satisfied moron to actually listen and challenge your own ridiculous assumptions.

    If you really cared about “poor people”, stop the preening – which is really all that progressives are good at. The day I’ll believe you actually give a damn about poverty is the day progressives realize that poor people are actually human beings with agency rather than pets and props to boost your own egos.

    Idiot.

  • wilfranc

    I was listening to a local talk show late last week, where a worker in a small community bank said they are bracing to lose the ability to make mortgages after this is over. He predicted that only a few large banks will be left, leading to a central bank.

    I thought he sounded credible, and what was sad about his call was the tone of resignation in his voice that this bill has the possiblity of eliminating small banks, not directly, but indirectly. How he explained it was simple:

    Most people do their banking (checking, savings) where they get their mortgage. If your local bank can no longer loan you money for your home, will you really use them for your personal accounts? Would you if the big bank gave you a quarter point off for banking with them too, like my little bank did years ago?

    Both Wall Street and Washington are partners in greed. Both exist to keep and expand their bueracracies. All current and future legislation seems directed toward those goals; more regulation means more employees, which requires more money, etc.

  • Tbone

    I have no sympathy for that den of crooks.

  • dsmurf

    but, extorting? Not so much of a stretch.

    There was a record number of call options bought last week, Goldman is a market maker, who sold all of the call options?, and then had the suit announcement on an expiration day?

    I think someone may have been looking out for Goldman, a civil suit against Goldman for $1Billion, GS loses $23 per share or about 23 billion,
    The following quote is from a free stockcharts blog and email from their third entry on April 17th 2010.

    “But here’s the really ironic part of the GS story. GS has market making operations. Does anyone else see the irony in this being announced on options expiration Friday? Let me tell you that prior to Wednesday, the largest daily spread of equity calls traded vs. equity puts traded was 1.5 million contracts. After Intel (INTC) reported better-than-expected earnings on Tuesday, the spread of equity calls vs. equity puts skyrocketed to 2.0 million contracts on Wednesday. On Thursday, that spread was 1.8 million contracts. In other words, options traders have NEVER been so optimistic about the short-term market prospects and when everyone is buying up those calls, who is on the other side of the trade? Well, it’s one of the responsibilities of the market maker – to provide liquidity in the marketplace. My proprietary relative complacency ratio hit 29% by Thursday’s close. This is a useful sentiment indicator based on equity options trading and it marked the second consecutive day over 25%, which are the only two days it’s ever been that high. Relative complacency generally marks tops. I’ve never seen the market print extreme readings like the ones on Wednesday and Thursday. So now let’s discuss the timing of the SEC’s Friday announcement. While GS likely stands to be slapped on the wrist at some point in the future for these alleged violations, I can only imagine how much the timing of the SEC’s announcement cost all those call buyers on Wednesday and Thursday and helped turn profits at market making units like Goldman Sachs’. Let me just guess that it’s more than $1 billion and leave it at that. I’m calling it the 2010 financial bailout, as if they needed another.”

    Sounds like GS gets the last laugh on this one.
    Anyone notice the IBD editorial about how HUD still wants the subprime market to continue, and keeping Fannie and Freddie under the Government control? And Dodd only wants a $50 Billion bailout fund when the US is already underwriting over $20 Trillion to the financial industry> see Nicole Gelinas viewpoint in IBD, page A17

  • Marcus_Traianus

    It is easy to buy this Marxist rhetoric without examining the facts. Witness all the Wall Street denizens that have been frog-marched for the cameras. That would be pretty much none, in case you are wondering.

    There has been plenty of hand-wringing, rock throwing and villain making without any basis in fact. The shorthand meme, none of which is true, goes something like this; evil banks fooled people into borrowing money in amounts they could never afford to repay, they conspired to make large bets- which were turned into huge profits by defrauding investors, taxpayers and the government. Wall Street then asked to be “bailed-out” because it would have otherwise wrecked the economy and been chaos.

    Besides being contra-intellectual to business longevity, most of this is also illegal and fallacious. The truth is banks played within the rules set (and enforced-e.g. CRA, etc.) by regulators. They were assisted by government controlled entities such as Fannie-Mae which became political piggybanks (that would be Capital Hill, using your money). The government stood idly by making cheap money available to fuel and over-inflated housing market because it was in their political best interest. The so-called bailout was actually forced on most of the banking community, who were essentially threatened with their very existence if they did not participate.

    You would think that as Obama and Co. were pushing another heavy handed “reform” (quotes intentional), one might stop and say why the charges against GS now, especially after 1 1/2 years of the SEC turning up- nothing?

    The fact of the matter is Goldman went long on the CDO in question and essentially lost money, betting the same way as the so-called major, professional global investor they allegedly defrauded. Did you hear that anywhere? I thought not.

    The SEC complaint continually repeats the word mortgage or pools of mortgages, but none of those instruments are actually “held” in this type of CDO. Ever wonder why the SEC is so prolific in the use of terms and buzzwords that are poll tested to produce negatives with the public? Ever wonder why they are continually repeated by the MSM? Simple answer, because sheep follow the rhetoric and never take the time to understand that Wall Street isn’t the bad guy. It is politicians sitting in their despicable offices, making diversions and throwing red meat to wolves who are already nipping at their heals.

  • acat

    What’s needed is honesty, integrity, and accountability in the men and women doing the enforcement.

    One of the most important roles of the Executive is just that – maintaining public trust in the enforcement departments.

    Hasn’t worked real well in a long, long time, though.

    Mew

  • Ausonius

    Willkie fought for most of the 1930′s to save his company, Commonwealth and Southern, a holding company, from being run out of business by the TVA.

    The whole point of the TVA for Senator George Norris of Nebraska, was to socialize the energy business for the Federal government. Norris and TVA bureaucrats spent a good amount of time “compromising” with Willkie, which usually meant that Willkie lost piece by piece.

    The point was that their long-term goal was to run Commonwealth and Southern out of business: eventually Roosevelt played the class-warfare card – again – and made holding companies for power illegal. Willkie was paid handsomely to go out of business.

    He had been a Democrat the entire time of this fight. In 1939 he switched parties.

    We may see Goldman Sachs paid handsomely to go away, so that the government can dominate national finance.

  • Ausonius

    Willkie fought for most of the 1930′s to save his company, Commonwealth and Southern, a holding company, from being run out of business by the TVA.

    The whole point of the TVA for Senator George Norris of Nebraska, was to socialize the energy business for the Federal government. Norris and TVA bureaucrats spent a good amount of time “compromising” with Willkie, which usually meant that Willkie lost piece by piece.

    The point was that their long-term goal was to run Commonwealth and Southern out of business: eventually Roosevelt played the class-warfare card – again – and made holding companies for power illegal. Willkie was paid handsomely to go out of business.

    He had been a Democrat the entire time of this fight. In 1939 he switched parties.

    We may see Goldman Sachs paid handsomely to go away, so that the government can dominate national finance.

  • Common_Cents

    There are no coincidences.

    Now the crook countrywide Dodd is out pimping financial reform.

  • earlgrey

    If they used Reconciliation to pass healthcare? I heard there are 8 republicans ready to jump on Financial Reform Bandwagon. At least I heard that last week from Breitbart. This weekend I saw something that said Collins may oppose. She was one of the 8.

  • http://www.laborunionreport.comandhttp://www.laborunionreport.blogspot.com LaborUnionReport

    One overlooked ingredient here:

    The president will make his remarks at Cooper Union on the same day the Senate is expected to begin debate on the regulatory overhaul, and the AFL-CIO organizes a march on Wall Street to support the legislation.

    http://blogs.wsj.com/washwire/2010/04/19/obama-to-pitch-financial-overhaul-on-wall-street-thursday/

  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

    Sachs and even against them, given the govt’s workings with them since 2008, it is highly likely that this is adiversionary tactic to keep heat off the main crooks

    our government

  • bobojake
  • NoDoze

    what the Dem strategy is without reading the bill? And be assured that we will have to pass it to find out what is in it.

    Rush Limbaugh has the most plausible scenario on this “reform” bill. Suppose that the bill helps Goldman better compete against small banks. A slap-on-the-wrist fine would mean nothing, except that it would give O and fellow thugs a propaganda tool, and help them to pass the real agenda: further socialization of the financial industry.

  • uselogic

    did a little shorting through his intermediaries? Would love to see a list of folks who did.

  • ithos

    The charges are lame and will not hold up in court. Obama knows this. He wants to appear to be taking down GS while doing minimal damage since the company is a huge Democratic supporter. Since when it is required to reveal the party on the other side of a trade. The buyers were very sophisticated and knew full well they were going long subprime mortgages.

    Goldman Sachs are greedy blood sucking parasites on the face of free enterprise. They have helped numerous entitles such as Greece deceive investors on their true liabilities. They have caused untold carnage by their bribing of politicians to leave the derivatives markets unregulated. And when it blows up in their face they pull strings to have the taxpayer bail them out.

    By bringing up such ludicrous charges in civil court, the SEC knows full well that their actions are all bark and no bite.

  • 6eorge Jetson

    I’ll give you the schadenfreude

    But I read the sentence

    I do not want Obama to do this, but the populist in me says Goldman should have ALL its assets seized and divided amongst the taxpayers.

    as fantasizing about the types of power grabs that Dems can’t restrain themselves from. After the situation passes, the power grab remains to the benefit of the graber.

  • antisocial

    .

  • cardindrake

    options expiration Friday?
    Put options on GS sold for a penny the day before, and $9:00 Friday afternoon. An $1100 investment returned over a $1M.
    Who will investigate all the insider trading that happened? Thousands of contracts were bought.
    It takes brass balls to accuse someone of fraud while orchestrating the perfect insider trading scam. I don’t know who is worse–GS or the SEC.