Early Retirement Blog

After a two year investigation, the SEC has finally brought a case against Goldman Sachs, filing fraud charges against Goldman Sachs, for it’s role in the sub-prime mortgage collapse.   Why now? The timing certainly looks suspicious.   Happening three years after the meltdown in the housing market, and just when President Obama struggles to get his meager Financial Reform package passed in Congress.

Why Now? Mitch McConnell.   Goldman Sachs has their own stupidity, and Mitch McConnell, to thank for the sudden SEC lawsuit.    Kentucky Republican Senate Minority Leader Mitch McConnell held a private meeting last week with the top 25 hedge fund managers and bankers on Wall Street, where he offered to kill financial reform in the senate, in exchange for making Republicans the exclusive beneficiaries of their sizable campaign contributions.

The Obama administration, and leading Democratic Senators, reacted swiftly and harshly.   At the same time the SEC was announcing fraud charges against Goldman Sachs, for their role in the housing bubble crash, Democratic Senators were publicly accusing Senate Minority leader Mitch McConnell of working for Wall Street and of lying to the American people.

Republican Senator John Cornyn, in charge of fund raising for Senate Republicans, was also at the meeting. Worried about how a secret campaign financing agreement between Wall Street and Republicans would affect their re-election chances, and not interested in a repeat of the health care battle, the White House and Democratic Senators suddenly became populists.

The SEC filing was meant to send a clear message to Wall Street from the White House and Senate,   their will not be a repeat of the health care fiasco, and funding only one party is not how the game is played.

Next, in “The Case Against Goldman Sachs“, I will explain the role of John Paulson, the mysterious hedge fund manager who is at the center of this scandal.   In the meantime, you can read these two Goldman Sachs articles, which explain how Goldman Sachs operates.

Your Big Fat Greek Retirement
Why Goldman Sachs is Dangerous

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