Obama’s Wall Street Bill Lets Crooks Escape
April 26, 2010
By Cliff Kincaid
The indictment of Goldman Sachs is as deceptive as the “financial reform” bill that President Obama and the liberals are pushing on Capitol Hill, says Zubi Diamond, author of the blockbuster book, Wizards of Wall Street. Diamond is warning legislators not to fall for the Obama Administration’s claim that the legislation somehow punishes Wall Street for bad financial practices.
Diamond, who has emerged as a major critic of the unregulated hedge fund industry, says he was not surprised that the Securities and Exchange Commission (SEC) named hedge fund short-seller John Paulson as a key player in the Goldman Sachs scheme to defraud investors but failed to indict him.
Diamond says that Paulson is being let off the hook because he is a member of the most powerful special interest group working the corridors of power in Washington, D.C.―the Managed Funds Association (MFA). He says the major media are afraid of taking on the MFA, which calls itself “the voice of the global alternative investment industry,” because of its tremendous financial clout.
“The SEC charges against Goldman Sachs are a ruse, a ploy, and a smokescreen to get the Dodd financial reform passed,” he said. The bill, he argues, fails to hold the multibillion dollar hedge fund short sellers accountable for their illegal market manipulations. One of these short sellers, not named in the Goldman suit, is billionaire George Soros, known as the man who “broke the Bank of England” by betting against the British pound and who was convicted of insider trading in France.
The firms of Soros and Paulson are key players in the MFA.
As AIM reported back in January of 2008, Paulson, who had already made billions of dollars betting that the housing market would collapse, had met with George Soros about using various “financial instruments” against the U.S. economy.
We warned at the time: “The American people should be quickly educated by our media on how very rich people like Paulson and Soros make ‘bets’ on the rise or fall of national currencies and economies. Paulson is now telling investors ‘it’s still not too late’ to bet on more economic problems. These are capitalists who seem to have a vested interest in the further decline of the U.S. economy.”
Soros refused to talk about his meeting with Paulson, according to the Wall Street Journal.
While Paulson has contributed financially to both major political parties, Soros is a major financial backer of Obama, the Democratic Party, and “progressive” organizations like the Center for American Progress (CAP), which Diamond labels the “Center for American Destruction” and the base of Marxist operations in the U.S. today. CAP President John Podesta recently re-hired Van Jones, the communist “Green Jobs” czar ousted from the Obama Administration for allegedly concealing his radical views.
If John Paulson had been charged along with Goldman Sachs, says Diamond, “It would lead to other charges such as insider trading, manipulation by collusion, conspiracy to defraud the banking industry and their shareholders, bribery of government officials, political campaign law violations, possible election fraud and interference with the 2008 presidential election.”
He says, “Do not forget some people died by suicide as a result of losing all their money due to the financial violence visited upon them and millions of American families by the hedge fund short-sellers George Soros, John Paulson and pals.”
If such charges were to be brought, the scandal would be bigger than Watergate, Diamond says, and it will shed light on the stock market manipulators in the MFA, their strategic partners, alliances, and the hedge fund short sellers who are in fact responsible for the financial crisis.
In the Goldman case, as noted by the New York Times and other major media, the SEC filed a civil fraud lawsuit against the firm for neglecting to tell its customers that mortgage investments they were buying consisted of pools of dubious loans that Paulson had selected because they were highly likely to fail. By betting against the pool of questionable mortgage bonds, Paulson made $1 billion on this deal alone when they collapsed just a few months later.
Although Paulson’s role in devising the financial instrument that caused the losses is detailed in the complaint, he is not named as a defendant in the suit.
Rather than demand action from the SEC, the major media have been content to repeat nonsensical SEC claims that Paulson was somehow not involved in the fraudulent aspects of the scheme.
“If John Paulson were charged along with Goldman Sachs, it would lead to other players as well and blow the case wide open,” Diamond told Accuracy in Media.
After the financial bailouts began, just weeks before the 2008 presidential election, Diamond, an African immigrant, a naturalized U.S. citizen, and a successful businessman, began his detailed examination of how the hedge fund short sellers were operating behind the scenes. The result was his explosive book, Wizards of Wall Street, which has generated enormous controversy on the Internet.
Diamond’s book makes the case that billionaire hedge fund short sellers deliberately engineered the economic collapse, making billions of dollars while ordinary Americans lost trillions of dollars in the value of their homes and investments. He says the purpose of the crash, in addition to making money for the hedge fund short sellers, was to elect Barack Obama to the presidency and achieve total control over the U.S. economy.
One book reviewer commented, “This is more of an exposé of who owns Barack Obama and put him in the White House!”
There is still time for the SEC to do its duty and bring charges against all of those responsible for the economic collapse, he says. But he thinks political considerations are guiding the entire process, and that the Goldman charges are a classic case of misdirection.
The charges filed are civil, as opposed to criminal, meaning that no one will go to jail.
Diamond says that Obama is working with liberals on Capitol Hill to pass a “financial reform” bill that has absolutely nothing to do with the root cause of the economic crisis―the people like Soros and Paulson. These are the hedge fund short sellers, whom he labels the “bad Wall Street,” and who worked as members of MFA to cause the economic crisis.
Diamond contrasts the hedge fund short sellers with the “good Wall Street” of banks and investors which help produce goods and serve the public, including by providing badly needed jobs.
The hedge fund short sellers are not capitalists in the traditional sense, he says. They are anti-capitalists because they are predators who feast on companies and economic sectors that can be buffeted by market manipulations through collusion and unrestricted short selling.
Diamond says that the failure to bring charges against Paulson in the Goldman case means that the whole process is a political deception and that the “financial reform” bill is a fraud.
The charges against Goldman are just “throwing the public a bone, a sacrificial lamb to further the cause of passing the Dodd financial reform bill,” Diamond went on. “But the legislation is based on the false premise of ‘too big to fail’ being the cause of the economic crisis.”
The problem is not that some banks and companies are “too big to fail,” he says. Instead, the problem is that major industries are being looted by the behind-the-scenes hedge fund short sellers who make money through market volatility, unrestricted short selling, a company or country collapse, and generally through economic calamities.
A piece of legislation is not needed to prevent a future bailout of any company, Diamond points out. He asks, “Was there previously a law that required the government to bail out any company? The answer is NO. They did not have to bail out any company. They chose to do the bailouts, in order to replace the money looted by members of MFA. Meanwhile, the nation continues racking up more debt in trillions upon trillions of dollars to replace the stolen money.”
“George Soros and Obama adviser Larry Summers were recently laughing it up in Davos, Switzerland,” Diamond notes.
He adds, “The only reform that is needed is to restore the safeguard regulations which protect the invested capital from being looted by the hedge fund short sellers. These financial market safeguards were removed by former SEC Chairman, Christopher Cox, due to the lobbying influence of MFA.”
In a previous column, Diamond explained the nature of these safeguards and reforms.
In terms of the case against Goldman, Diamond predicts the result will be a financial fine and the firing of a Goldman vice president, who will then turn up working for a member of the MFA.
Diamond says the embarrassment to Goldman Sachs from the charges is a small price for the MFA to pay in order to get the financial reform bill passed, “which will cover their role in engineering the economic collapse, exonerate them from culpability, distort history in their favor, and put all the publicly traded companies under their potential control.”
The American people must be made to understand that the Managed Funds Association is “the secret government within the Obama administration,” Diamond argues. “They had to give an example of bad behavior on Wall Street as a compelling reason to quickly pass the Dodd financial reform bill, but since they could not find any example from the ‘good Wall Street,’ who are the victims of their crimes, they had to use one of their own. The case, however, is deliberately designed to be weak by letting the big fish off the hook.”