For those of us trying desperately to wrap our heads around the Security and Exchange Commission’s allegations against Goldman Sachs, the Wall Street Journal’s recent article on the alleged fraud is a real boon. The article is clear and concise (or at least as clear and concise as can be expected when a describing multi-stage transaction that involved more than 500,000 mortgages in 48 states), and, perhaps just as importantly, it frames the events in a way that recognizes that the economic collapse was a fundamentally human event—caused by human greed at the cost of human suffering, and leading to even greater human suffering.
According to the article, the allegations involve a massive bet, booked by Goldman Sachs and placed by hedge fund manager John Paulson, that would pay off if people across the country could not pay their mortgages. He allegedly took a particular interest in adjustable rate subprime loans issued to people with poor credit scores, rightly believing that the people who had taken out these shady mortgages didn’t really understand how big their monthly payments would eventually become. As we all now know, Mr. Paulson was all too right, and he profited to the tune of more than $1 billion as foreclosure rates shot up.
by Zach Carter, Media Consortium MediaWire blogger
As Congress finally winds down what House Financial Services Committee Chairman Barney Frank, D-Mass., refers to as "the session that will not die," most of us have already contracted cases of outrage exhaustion from the barrage of Wall Street-related absurdities that the government has embroiled itself in over the past year.
It's time to continue our look at the Cabinet in the upcoming Obama administration. Second - Secretary of the Treasury, perhaps the most important appointment President-elect Obama will make, given the current economic circumstances.
There are several excellent options - some who served in the Clinton Administration - some outsiders - and even some paradigm breaking choices. For convenience, I've taken the list from a betting site (yes, it is in the order of the oddsmakers' favorite).
There were Republicans on the list, and I've left out the "I don't believe it" names still on the betting lines such as Phil Gramm and Bob Zoellick. There's also some chatter about keeping Paulson on, temporarily to administer the bailout. So as distasteful as it seems, I kept his name on the list.
Perhaps one key criteria (which you're free to throw to the side of the road) is whether the candidate would inspire confidence in the markets.
(X posted at MyDD - will X post at DK, as soon as the clock allows me to post another diary there)
to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed
Declaration of Independence, 1775
I've written before about why the bailout is a bad idea economically. But more significantly, to pass it now threatens the basis of our Republic. A government must be legitimate to function, and for a Republic, legitimacy means the representatives must listen to their constituents. The public outcry against the current bailout has been overwhelming, with 2-1 and 3-1 opposition in polls and virtually 100% opposition in direct contacts to representatives.
Anybody participating in political discussions right now understands the depth of the resentment, not so much at the plan, but at the feeling that we don't matter. From left to right, we Americans are unified against this plan - not necessarily against any intervention, but against this intervention. If the plan passes against this kind of opposition, many will decide the government no longer represents them and no longer has the right to speak for them. Our government will no longer be legitimate.
The basic problem with respect to the government's role in the economy is systemic corruption, not lack of regulation. This is tolerated by both Democrats and Republicans.
Catherine Austin Fitts (solari.com) suffered through 18 audits and investigations, and 12 pieces of litigation over 13 years, and came through clean as whistle. Her software, which would have shown the fraud and abuse of Federal dollars on a community by community basis, was essentially stolen by the Department of Justice.
Why is Paulson insisting on a lack of transparency and oversight? Why is he insisting on not spreading Is it because there is something he doesn't want you to know? Want to learn how $700 billion can just disappear? Follow me below the break for a scary ride into a possible future...
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