Friday, April 16, 2010

Breaking - S.E.C. Sues Goldman Sachs for Fraud

Pay attention to this, it is extremely important, but not because our S.E.C has finally grown a pair and decided to enforce the rule of law. No, I think there’s way more to this than meets the eye. (ht LostDude)
U.S. Accuses Goldman Sachs of Fraud

Published: April 16, 2010









Mr. Paulson is not being named in the lawsuit.



















The Abacus deals deteriorated rapidly when the housing market hit trouble. For instance, in the Abacus deal in the S.E.C. complaint, 84 percent of the mortgage bonds underlying it were downgraded by rating agencies just five months later, according to a UBS report.



No kidding, this is exactly what everyone’s known all along, that GS, and their insider clients, have been profiting by betting against the very debt products they help to package and sell.

Is the U.S. Government really getting serious about going after these guys? NO WAY. There are always token fall guys and this is all theatre and show.

Think about the timing of this. It comes just as I have been talking about a “triggering event” that will take the blame for turning the markets. This suit was reported AFTER the open on OPTIONS EXPIRATION day. Why now? My suspicious mind says that it was timed to allow the options sellers and contract speculators to walk away and to instill maximum damage on the retail buyers of the ALL TIME RECORD number of option call buyers who were in the market just yesterday.

Markets almost always turn on such sentiment extremes, but I know that Goldman controls the government and absolutely is in control of the S.E.C. too! It’s almost a joke to me that they would turn the markets by allowing the S.E.C. to bring suit against themselves. And I’m willing to bet the majority of people will believe there’s no way they would do that. Want to bet?

Watch future events unfold, I can almost guarantee that there will be fines that are later mitigated, that a few people may take a fall, but nothing real or meaningful will come of it other than an opportunity to profit on the short side after running the market up to bubble extremes. It’s a nice game to play when you control all the pieces on the board. Meanwhile the people of the world are simply played as fools and pawns. How’s that feel, were you long the market?

How many times before people learn that what’s most important is not WHAT backs your money, but WHO is in control. America gets what it deserves, karma’s a bitch and it seems to be going around.

Not an hour before the release of this I was talking about bubbles and triggering events that take the blame. Take a look at the 30 day, 30 minute chart of Goldman Sachs. All parabolic profits of the past month GONE in an instant:

Here’s a 3 month version:

The XLF is hit hard by this, breaking its current uptrend. To the people who do not understand the VIX sell signal and were saying that it was not valid, I have only this to say:

Media ecstatic of late? Do you enjoy record setting roller coaster rides with your investments and your markets? Think 60% market dives and 70% + recoveries are normal and healthy? There's no doubt more games are coming, it's not normal and it's not healthy. It's Enron times a million.