Yesterday

What happened with that Goldman thing...

the short version

Goldman knew for months it was the subject of an investigation here. The gist of it is that someone who was responsible for picking the securities in a collateralized debt obligation (CDO) had a vested interest, through goldman, of it failing. The theory is you're supposed to put all this sort of stuff in a prospectus... but those aren't generated until after the sale anyway (welcome to idiotland for regulation). So they're going after Goldman for this - in a way it's not much different than what they were doing with Greek debt, only writ much smaller.

It's a speeding ticket.

In the mean time, knowing that with a couple of flabbergasted statements and angry uncomfortable looks they could spook the market... and knowing that it was options experation day... the thing is - if you come to the last day and know the market is going to move a LOT - you get an unbelievable amount of leverage... And they played that hand BIG yesterday - betting that the news of the assault on them would drive the S&P down and then feeding into it. They made tens of millions - on paper in public - something that wouldn't have been possible if the SEC had done this on a day other than options expiration day... and that's in the above the board world. Imagine what such a substantial movement of options contracts does to the trillions and trillions of off balance sheet derivatives.

What's going to happen?
No one will change the fact that CDS is gambling backed by the US Treasury implicitly through the fact that we, the taxpayers, will always be left with the bag if they fail.
NO ONE WILL DO ANYTHING because the oligarchs OWN THE GOVERNMENT.
Fabulous Fab will be prosecuted...
Goldman will agree that there's the 'perception of fraud' without agreeing that they did anything illegal...
They'll pay a record fine (much less than they made shorting yesterday)...
and Fabulous Fab will be out in a couple years running his own hedge fund (with money drawn from those who profited by all of this).

The politicians will get nice fat contributions...
the lawyers will get nice new cars...
and the country will be one step closer to the bottom of the drain.

There's no 'fixing' this. It's a cancer that's spread too far.