The Goldman Strategy

This could be called 'The Goldman Strategy'. A strategy to stifle all real reforms in favor of the banking system's stranglehold on our economy and way of life. We've already had numerous calls to cut back much needed services and the certainty that there will be calls for Greek style austerity measures here in the US grows daily. It is absolutely pathetic that our current Congress can't muster up the guts to stand up to the people destroying our economy and nation for their personal, private gain.

The Last Hold Out: Senator Blanche Lincoln Against 13 Bankers

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Legal authority against market manipulation would be greatly strengthened and there would be more protection for whistleblowers. And the kind of transaction that Goldman entered into with Greece – a swap transaction with the goal of reducing measured debt levels, effectively deceiving current and future investors, would become more clearly illegal. All of this is entirely reasonable and responsible – and completely opposed by the most powerful people on Wall Street.

Of course, most of the anti-Lincoln fire has been directed against the idea that “swaps desks” would be “pushed out” to subsidiaries – i.e., the big broker-dealers could still engage in these transactions, but they would need to hold a great deal more capital against their exposures, thus making the activities significantly less profitable.

It is striking that while Treasury argues that increasing capital is the way to go with regard to financial reform, they are adamantly opposed to what would amount to more reasonable capital levels at the heart of the derivatives business.

This is beyond disappointing.

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