Friday, April 16, 2010

So Many Jerks on CNBC Today that I Can't Pick Just One

The free market ideologues on CNBC regularly oppose additional regulation of Wall Street on the grounds that "Fraud is already illegal."  One might think, therefore, that they would be pleased by the the case that the S.E.C.'s announced against Goldman Sachs.  This isn't a complicated case involving obscure regulations.  It is a case of lying.  Goldman sold collateralized debt obligations.  The underlying mortgages for the CDO had been selected by a hedge fund manager who bet against the securities.  Goldman told its customer that the mortgages had been selected by an independent third party.  Also Goldman told buyers of the CDO that the hedge fund manager owned the CDO when in fact he had bet against it.  Felix Salmon of Reuters provides a nice summary of the facts of the case.

Shockingly, the douche bags on CNBC weren't pleased at all to see fraud being prosecuted.  The clip below is typical of the Wall Street apologists who appeared all day.  CNBC's Simon Hobbs saw it as a big change in the rules.  He was outraged by this new "duty of care" that would prohibit Wall Street from lying to its customers.  Bank analyst Anton Shutz called it a "witch hunt" even though he acknowledged that Goldman Sachs were responsible for its employee's wrongdoing and deserved to be prosecuted.  Melissa Francis couldn't see anything questionable about a short seller picking out which mortgages went in the CDO.

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