This article was submitted by Sean Z. Thanks for the article and link.
How Goldman Trashed a Town
By Stephen Gandel
Starting in July, Liza Kuzela of Cedar Rapids will pay $0.44 more a month to have her trash collected. The amount is trivial, but the reason is not. Two years ago, Cedar Rapids lost $2.6 million on an investment tied to a Goldman Sachs bond deal Abacus that the Securities and Exchange Commission claims was rigged to fail.
When the bond went bust, hedge-fund manager and Goldman client John Paulson pocketed a billion dollars. Kuzela, her neighbors and others around the country with no ties to Wall Street are picking up the tab. The case of Cedar Rapids and Goldman illustrates how everyday Americans end up paying for Wall Street's big paydays.[Larry} Relative to my last post, this type of news should be headlines but is not. Stories such as this give cause for more investigations and cause for legal actions with teeth. As this article says,
Regulators have begun to bring charges against firms that constructed and managed the complex financial transactions that were struck at the height of the housing bubble. Many look like they were purposefully set up to fail. (emphasis added by GS666)[Larry} Other then the SEC in their case against GS what regulators have begun to bring charges? There are charges pending in BK court on Lehman but Lehman is already defunct and I would bet a derivative that no one person will ever be charged or do time for the crime. Further more, what about all the other banksters out there on Wall Street? They have all taken shelter within bigger Too Big To Fail banks like JP Morgan and Bank of America who themselves should be investigated but seem to have a "free get out of jail card".
I believe there are laws on the books that cover what the last line in the quote above points out - "many (CDO's, CDS's) were PURPOSELY set up TO FAIL. Is it not a crime to sell a security that carries a good (but false) rating that is known to fail? I believe this falls under the catagory of FRAUD and fraud is illegal.