Senate Hopes to Nail Goldman to Cross of Greed

Well here we go. Senator Carl Levin, chair of the Senate Permanent Subcommittee on Investigations, is making noises about prosecuting leading executives at Goldman, Sachs, and there are probably enough people who know little about the business of Wall Street to get behind such accusations.

Unfortunately it's the type of witch hunt that will lead to exoneration in an actual court of law where innuendo actually has to be proven.  It would be nice if legislators spent more time on improving or tightening laws instead of retroactively trying to criminalize what was then (and still is) legal behavior.

Huffington Post "reports":

More than any: other government report produced in the wake of the crisis, this account names names, blaming specific people and institutions: Goldman Sachs, Washington Mutual, Moody's Investors Service, Standard & Poor's, the Office of Thrift Supervision and others. It targets four types of institutions, all of which it says played key roles in causing the crisis: mortgage lenders that offered prospective homeowners booby-trapped loans; regulators that were paid by the institutions they were regulating and cooperated in widespread deception; rating agencies that gave seals of approval to products they knew to be especially risky, all in the pursuit of market share; and Wall Street banks that duped investors into buying securities that only the insiders knew were destined to go bad.

(HuffPo)

The fact remains that Goldman took a wise counter position to sophisticated investors who wanted what they had to sell. Going short is not criminal, nor should Goldman have to hold the hands of clients who are intent on getting in on what was then a still hot (if shaky) market. We've a hard time seeing how this results in prosecutions that stick, and if you are going to go after Goldman, you will for consistency have to go after every firm, large and small, that engaged in similar activities. Good luck with that.