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Pure Politics

Goldman Sachs found itself in a bit of trouble today:

Goldman Sachs Group Inc.—one of the few Wall Street titans to thrive during the financial crisis—was charged with deceiving clients by selling them mortgage securities secretly designed by a hedge-fund firm run by John Paulson, who made a killing betting on the housing market’s collapse.

[…]

The civil charges against Goldman and one of its star traders, 31-year-old Fabrice Tourre, represent the government’s strongest attack yet on the Wall Street dealmaking that preceded, and some say precipitated, the financial crisis that gripped the nation and the world. Goldman’s shares fell 13%, one of the steepest slides since the firm went public in 1999, erasing some $12 billion of market capitalization.

The SEC lawsuit likely strengthens the position of President Barack Obama as he tries to push financial-overhaul legislation through Congress. He vowed Friday to veto any version of the bill that doesn’t bring the derivatives market “under control.”

It’s interesting that this charge is coming on the eve of vote on the Democrats’ financial regulation bill, which more than likely, will have gained momentum from today’s news.  The other story of course, is that it gives Democrats some ammo going into the midterms and to the President for his re-election bid in 2012 as well.

That’s essentially what this story is about until I can tell otherwise.

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