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Goldman Sachs Mortgage Fraud Confirms Gordon Brown's Responsibility for the Financial Crisis

Politics / Credit Crisis 2010 Apr 16, 2010 - 01:53 PM GMT

By: Nadeem_Walayat

Politics

Best Financial Markets Analysis ArticleGordon Brown yesterday confessed that Labour's light touch on financial regulation was a mistake that contributed towards the financial crisis. Previously he had repeatedly self congratulated himself for saving the banking system from collapse and blamed lack of banking sector regulation on pressure from the City of London, form the banking sector, Bank of England and FSA, all of whom he alluded to wanted light touch regulation so as to maximise profits which funded Labours public sector spending spree which he says he reluctantly went along with rather than implement the regulatory reforms that he had all along envisaged.


On ITV Grown Brown admitted -

"In the 1990s, the banks, they all came to us and said, 'Look, we don't want to be regulated, we want to be free of regulation.' ... And all the complaints I was getting from people was, 'Look you're regulating them too much.'

"The truth is that globally and nationally we should have been regulating them more. So I've learnt from that."

"You don't listen to the industry when they say, 'This is good for us.' You've got to talk about the whole public interest.

"And so we are tougher on the banks and tougher on the way they behave and we can be relied on to make sure the banks act in the national interest."

Today the U.S. SEC charged Goldman Sachs with Mortgage Fraud. Alleged Fraud that was apparently conceived and from Goldman Sachs London offices under Gordon Browns light touch financial regulation regime.

Fraud that British tax payers had to pay the consequences of to prevent the collapse of mega-banks such as RBS and HBOS.

Fraud that contributed to wiping out 6% of the British economy and setting the economy back permanently at least 5 years in terms of lost economic output.

Fraud that has put Britain firmly on the path towards high inflation and eventual bankruptcy with total public debt heading for 100% of GDP from 40% of GDP prior to the crisis.

The Goldman Sachs alleged mortgage fraud lies at the very heart of the financial crisis in that Goldman Sachs was betting AGAINST the mortgage backed securities full of sliced and diced Toxic assets that were mis-rated by culpable ratings agencies as safe Triple AAA securities, that Goldman was selling to investors that would soon see them virtually all go bankrupt and head for tax payers to bail them out.

Goldman Sachs was effectively betting that millions of U.S. home owners would lose their homes that would wipe out the value of the mortgage backed securities that it was deliberately mis-selling to investors. Goldman Sachs was priming the U.S. housing market for a crash so as to maximise profits. This strategy included shorting large holders of mortgage backed securities such as Bear Stearns and Lehman's. This is NOT news, we have known about this since late 2007 ! as illustrated by numerous articles, I am talking hundreds of articles at the Market Oracle, the only thing that is news is that Goldman Sachs and the other vampire banks such as JP Morgan, that despite buying influence into the U.S. Treasury and the Federal Reserve bank and bankrolling U.S. Politician's election campaigns is finally being held to account for 'some of their mega financial crimes.

However being charged with a crime does not necessary mean that Goldman's will be convicted as the institution will seek to grease the palms of those with political influence to ensure that nothing actually happens. Therefore I will be surprised if any of Goldman's executives are convicted of fraud despite the mountain of evidence.

More information and clarification on this breaking news story to follow in the coming days.

Source: http://www.marketoracle.co.uk/Article18715.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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