Goldman Fine - Thanks to You, SEC and President Obama !!!

July 19, 2010 - PRLog -- By David Caploe PhD, Chief Political Economist, EconomyWatch.com

Well, it’s not supposed to be nice to say “we told you so” –

but just about three months to the day, on the ever-auspicious 4/20,

we did indeed tell you we had real doubts about the alleged seriousness of the SEC’s civil – not criminal – charges against Goldman Sachs:

Unfortunately, we are not yet convinced that even the seemingly dramatic events with Goldman and the SEC are anything more than,

to paraphrase perhaps Shakespeare’s second most famous soliloquy, from Macbeth, “a tale full of sound and fury, signifying not too much."

Which, not to break our arms patting ourselves on the back, was precisely our conclusion

after going through an exhaustive analysis of the whole SEC vs. Goldman situation.

And so now, again, almost three months to the day the SEC announced it was bringing charges against Goldman, it’s all over –

with Goldman having to pay a “whopping” $550 million fine to the SEC, the largest it has levied in its history,

according to its announcement of the settlement.

Sorry, but pardon us while we yawn.

And it seems we’re not the only ones.

No one can forget the brouhaha that accompanied the announcement of the action –

and all the “hopes” this was going to be the so-called “Pecora Moment”

that was finally going to bring some justice to the forces – not just individuals –

who had created the global financial and then economic disaster we call Black September 2008.

And yet, to use the over-quoted Yeats line – surely you’re relieved we’re not going to use a Shakespeare allusion AGAIN –

it all ended with MUCH more of a whimper than a bang –

which you could discern from the fact you could barely find a story or analysis about the “resolution” on major American news websites by the next day !!!

To be sure, there was the obligatory New York Times News Analysis on Saturday –

which, as we have made abundantly clear, is the slowest news day of the week in general,

and especially during a holiday, or in this case, a “global warming summer” that is driving everyone on the US East Coast insane with the heat.

And it did have some substance to it, since it came to the exact same conclusion we did upon hearing the news, namely:

The Goldman settlement — both its size and its legal implications —

brought a palpable sense of relief on Wall Street
.

After two months of strident claims and equally strident denials,

the matter was finally settled, and for a price Goldman could easily afford.

The penalty amounted to about 15 days of profits.

On Friday, as other banking shares tumbled along with the broad market, Goldman’s share price rose again.

And why not ???

Goldman had become the villain not because of what they did:

as the Times’ outstanding bi-weekly Wall Street blogger, Bill Cohan, noted just a few weeks ago,

EVERYONE on Wall Street was doing more or less the same things,

as made clear by the Lehman Bros / Repo 105 maneuver

so clearly exposed in the Valukas Report, the one investigative effort –legislative / judicial / journalistic / blogosphere / whatever –

that has actually produced something of value, at least so far.

No, they became the villain because –

while everyone else pulling the same sleazy tricks was failing –

Goldman was succeeding !!!

Which was no doubt the reason our twisty friend Warren Buffett decided to make his bet on them in Black September 2008,

when the whole financial world seemed to be collapsing.

And in the end, you have to give him credit for making a smart bet with Goldman, because, as was quickly noted ,,,

To read more at http://www.economywatch.com, go to:  http://www.economywatch.com/economy-business-and-finance-...

# # #

EconomyWatch.com is the world's largest global, independent, economics community. Every month we serve over 750k users, who read and discuss economics, investing and finance topics.