Betting Against Goldman is Like Betting Against the House

That was the title of an article by Brett Arends in today's Wall Street Journal. His comments were directed toward investors and the recent SEC action against Goldman Sachs.

I couldn't have said it better myself!

Mr. Arends states in part:

.... someone betting against the Wall Street banks is also taking a big, big risk.  ...Betting against Wall Street is like betting against the house. These guys are well connected.

Wall Street is the number two source of campaign funding for politicians across the board, according to the Center for Responsive Politics, a non-profit that tracks money and politics. The only industry more important: Lawyers.

Since 1990, investment firms and their staff have given a staggering $683 million to federal election campaigns. While Democrats have done better in recent elections, this industry is not partisan: Over two decades the donations have split 51% to Democrats, 48% to Republicans. The GOP got a majority of the money from 1996 through 2004.

Here is a link; a subscription may be required:

WSJ-Arends-on-Betting-Against-the-House

I'm Not the Only Cynic - Congress and the Fed Work for the Banks

Here's and interesting summary of the recent financial disaster, explained clearly and naming some of the players. And yes, we were all a part of it.

The video was created April 7, 2010. There are two versions. The First is the "Long" version of about 13 minutes. The Second a shorter version, of 7 minutes. Watching these videos, you can see the source of some of the current congressional interest in politicizing the Fed. Unfortunately for us, the taxpayers and citizens of the U.S., the solutions proposed would simply pass the baton to the President and to Congress. And, given all the evidence of the financial crises, in these matters our Congress, which was also complicit, cannot be trusted either!

Visit msnbc.com for breaking news, world news, and news about the economy

The Government's Retort

In November 2008, one of our self esteemed bankers made a statement saying we don't need three automakers. See:

http://foreverthecynic.blogspot.com/2008/11/quote-from-banker.html

Well, the government has made its own statement. According to the Wall Street Journal on May 11, an administration official made this comment about shutting out the creditors in the Chrysler bankruptcy crisis: "You don't need banks and bondholders to make cars."

According to the article "..Chrysler's suppliers, dealers and unionized workers are critical to its survival -- and so is Fiat, which will contribute high-efficiency engines and foreign distribution [however] the creditors were expendable". The article went on to say that "Pulling a trick from the hedge-fund playbook, the government used its leverage as the sole willing lender to Chrysler, either in bankruptcy court or out, to extract deep concessions from some of the country's biggest banks".

So what goes around, comes around!

Thomas Jefferson had it right!

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered." Thomas Jefferson - Letter to the Secretary of the Treasury Albert Gallatin (1802), 3rd president of US (1743 - 1826)

On Fannie and Freddie:
Congressional Hearing about Fannie and Freddie

Here's Barney Frank's opinion of how we got there:
Barney Frank passes the blame