Ratigan Deconstructs Goldman, Connecticut AG Blumental Wants Criminal Charges Filed

Tyler Durden's picture

We expected Dylan to explode during today's show. We were disappointed as he somehow managed to contain it, and did a pretty good recap of the Goldman affair (if a little too many matchbox cars on the show for our taste). The notable take home for us was that CT AG Blumenthal said that "criminal charges have to be pursued against Goldman." We are sure Cuomo is not too far from this line of thinking. And we would be remiss if we did not point out that credit has to be given where it is due: Gretchen Morgenson (whom half the blogosphere was bashing a month ago over semantics) and Louise Story broke the entire story 4 months ago, and the SEC complaint reads verbatim from the authors' December 24 article.

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NP40's picture

The GS fraud charge coincided nicely with Obama's press release on Financial Reg Reform today. A coincidence I'm sure.

Once in a while they have to hit the "release" valve to satiate the populace. Oddly enough, the prosecutor handling the "Squid Fib" investigation is more than competent, in fact, some have stated he's tenacious. Did GS forget their monthly "tribute" to Treasury ?

ZerOhead's picture

Tenacious is one thing... but is he tentacular?

Remember... The squid does not lose!

tmosley's picture

But he might just be able to shed his skin.

dcb's picture

the time this was done right before the regulatory vote i noticed too

if you looked at ascending traingle spy 120 was  my target this was from many months ago (I have proof) also a great top key

we had a double bottom in long term treasuries (tlt)

the government doesn't want too hot a market. this raises their borrowing costs and brings inflation (oil/commodities). so they also  don't want to have to raise rates.

the fed is going to try and balance inflation/deflation oucomes.

the spread on long term notes (betwenn fed funds) and treasuries has never been greater


BrianOFlanagan's picture

exactly - even if he SEC does nothing but a slap on the wrist, the state AGs, some of which are not owned by GS, will do some real damage.  Go get 'em Blumenthal.

Tethys's picture

Definitely - with everyone piling on, the $$$ could really add up.  And since GS is way too big to fail, the costs of the subsequent bailout will be borne by ..... ah shit.


tmosley's picture

Interestingly, it would amount ot a transfer of wealth from the population of corrupt states to the population of less-corrupt states.

That's a hell of a thing.

Cognitive Dissonance's picture

This little lawsuit (with hopefully more to come) is just in time to be used as an excuse to take the market down. Clearly they (GS and the rest of the Ponzi) knew this was coming since there were inquires by the SEC of Goldman. So this helps to explain the near desperate and relentless stock market pump over the past few weeks, with rarely a down tick allowed. I was saying just yesterday that the RSI was at 20 year highs along with other market indicators. Now we know why. This should be an interesting experiment to see if the coming selling can be contained or if we will visit 666 once again.

Howard_Beale's picture

Give it 16 months, CD....333 S&P and Dow 3000. We are just at the beginning of many eruptions (some volcanic, some not) and while the buy the dippers will give it one more heave ho, this baby is going to plummet.

I do believe our beloved blog has become too jaded. This bear market rally was expected to go this far by a number of extremely good technicians--from Peter Eliades, Eric Hadik, to the Elliott gang. The Ellioticians thought 10,300 to 10, 500. Eric Hadik had 11,300 for his final top on April 15-19, and Eliades is calling for the top now.

This has been a normal bear market rally and it has either topped or will make one last stab soon. Whatever the excuse, it has done it's job. It has scared the shit out of the bears and most of the people on this blog. 

jdrose1985's picture

Give it 16 months, CD....333 S&P and Dow 3000

Agreed. This ain't over by a long shot. Dow 2600 is more like it (sounds crazy doesn't it?)

ZeroHedge is the place I come to for all my current event lessons and dissections.

For my history lessons I use EnterpriseCorruption.com. The world has always been simply management vs labor, not a fucking thing more.

Debasement, anyone?

ZeroPower's picture

Dow 2600? So S&P 200?

Come on man. I know its cool to be a bear and everything (here) but enough with this doomsday shit being posted. You DO realize if the indices would ever make it that far below, that would imply that a company like WMT is worth about 1/6 of what it is today. Along with all other (non-risky, non financial laden with toxic shit) companies. I realize P/Es are out of this world currently but i feel many posters here claming 'DJIA 3000' by end of year are simply perpetuating the crazy semantics of a few even crazier folk.

Dont take this post to be treated as moronic bashing from a bull, cause i dont intend it that way, but these bearish prophecies (nothing more) are quite stale. Yes a correction (or even new crash) is coming, but not to the levels some people here hope for.

chindit13's picture

Perhaps I speak from an experience which is not relevant, but I cannot rule out the possibility that a Dow of 3000 and an S&P of 350 might be in our future.  Does that mean WMT might be worth 1/6th of what it is "worth" today?  Why not?  Customers and sales are not a given, for anybody.  Indeed, a market collapse---or a great deflation---creates a negative feedback loop that decimates the factors on which the old valuations rest.

I worked as a prop trader in Japan for many years, through the top of their bubble and well into the decline everyone else there said was impossible.  From peak to trough the market fell 80%.  Real estate, in many places, fell 95%.  Those who could not think the unthinkable got hammered.  Even as the fall began, my Japanese colleagues (in a non-Japanese firm) kept assuring me---and challenging my bearishness at the same time---that either values would bring in buyers or the PTB would bring a halt to the madness.  Equities fell first, RE later.  Even when the Nikkei had tumbled, I was assured again that the government would not allow property to tumble.

We all know how that worked out.  Buyers were non-existent because everybody who wanted to be long already was.  Assets were leverage by other assets, kind of a tautology that meant any collapse became self-reinforcing.

That is not unlike what we have in the US today, with one major exception:  Japan was lucky the rest of the world was booming.

We are not so lucky.  Any boom we are seeing now is based on money creation.  The world is already sitting on enormous excess capacity, having created it with a level of debt not even imagined during Japan's heyday.

Ron Paul noted one of the idiocies of the optimists' current state of mind when he asked Bernanke if it made sense that Greece was donating to an IMF fund that would be used to bail out...Greece.

You might call me a "doom and gloomer".  Maybe I am.  Though it may or may not be relevant, I am pretty math savvy and I am fortunate enough to have attended our nation's top universities (BSc and MBA).  I think I understand economics.  I cannot see any possible way that the US, or the world for that matter, escapes a decline unlike anything modern society has ever witnessed.  The numbers don't work.

There is no savior out there, only a pile of false hopes and delusions.  China is not going to save itself, much less the world.  With 99% of its population earning less than $6K/year, the universe of potential buyers for all of the residential and commercial space they are producing is not large enough to absorb 2% of what will exist.  In the manufacturing sphere, China is now constructing steel capacity equal to what already exists in the rest of the world combined.  Unless you can point out where the demand for that steel is going to come from, there's a lot of deflation in our future.  Other industries are about to face similar capacity use issues.

We've had a great rally.  Every stop was pulled out to make the rally happen, and it lifted the spirits of much of the populace.  What it did not do was employ anyone, nor did it address any of the problems that caused the initial decline.  All we've gotten is more debt, and a slew of cheshire cat grins on the talking heads of CNBC.  The bad debts are still there.  The savings rate, while initially climbing, is again approaching zero percent in the US (and will go below zero in Japan this year).  Consumer debt levels still stand at 97% of their all time high, and this at a time when income is at best steady and more likely falling.  Don't worry if you haven't gotten your iPad yet;  soon you'll be able to pick them up by the truckload when you are the last one left with cash or available credit.

We've played a great shell game, but we've run out of places to hide.  Sovereign debt explosions were the last stop, and already (Greece, Portugal, Spain, Italy, CA, the US overall) we're having trouble paying the bills.

It's game over.  Given the experience of the last two years (bankrupt LEH, FNM, FRE, GM, C, BSC, AIG), and remembering the lessons from Japan post 1989, Taiwan in the 1990's (12000 to 2000), China from 2007-2008 (5100 to 1800), one would be foolish to rule out anything.

It is not doom and gloom;  it is historical precedent.  I'd like to be wrong, but I fear even I might be too optimistic.  Perhaps "people smarter than me" think we're out of the woods.  I guess long ago people smarter than me also "knew" the world was flat, and more recently people smarter than me knew Japan could not tumble.  We'll see who's right this time.

Bear's picture

The Black Hole awaits ... the FED's bullets are gone and I hear the buzz ... do our leader's in DC understand? or are they just hoping for change?

Howard_Beale's picture

Well said, Chindit. I also have all the credentials and am math savvy. I don't see it as gloom and doom at all. It's a natural end to a credit bubble and toxic waste.

Cognitive Dissonance's picture

HB and Chindit

The people who accuse us of being "all doom and gloom" are precisely those whose only active ingredient in the recent stock market pump was hope, wishful thinking and herd mentality. Their accusation of our emotionality is actually their implicit agreement that it was all smoke and mirrors, help aloft by a suspension of gravity and accomplished through the temporary suspension of logic, reason and common sense. They understand that the pin prick of reason will eventually (and quickly) deflate their balloon.

Crime of the Century's picture

Hey, even Rickards gets cheap-shotted by some morons here, so good company is abundant.

sheeple's picture

The people who accuse us of being "all doom and gloom" are precisely those whose only active ingredient in the recent stock market pump was hope, wishful thinking and herd mentality.

People better start getting outta their fucking alice-in-wonderland utopian bubble and acknowledge what's going on around them. Fuck the stock market, look at our jobs and education system for starters, then move onto tax systems and monetary policies ... stock market ? give me a break


SWRichmond's picture

That is not unlike what we have in the US today, with one major exception:  Japan was lucky the rest of the world was booming.

We are not so lucky.  Any boom we are seeing now is based on money creation.  The world is already sitting on enormous excess capacity, having created it with a level of debt not even imagined during Japan's heyday.

Life was easier than it should have otherwise been for the past 25+ years, thanks to central bank easy money pulling forward a generation-worth of demand.  Things are now going to be harder than they otherwise should have been: math.  And we can't even start the process of recovering until truth reigns in the financial markets and in the economy.

Sovereign debt explosions were the last stop, and already (Greece, Portugal, Spain, Italy, CA, the US overall) we're having trouble paying the bills.

A debt that is unpayable will not be paid.  It will be defaulted either through currency debasement or outright default.

cougar_w's picture

The future was raped by the present in service of the errors of the past.

I have children. I'm very uneasy about what has happened.

SWRichmond's picture

We have two young adult children who are entering what should be the most exciting and productive period of their lives.  We have anchored them both firmly: the thing that matters in life is family, and that will sustain them.  They are both incredible young adults, I am extremely confident in them, but I am a lot more than "uneasy" about what has happened, and what continues to happen.  It will be made more difficult by living in a declining empire. 

badgerman67's picture

Solid post. 

One of my guys tells me S&P peak of 1250, before resuming downward trend to 450.  Sell side guy that used to work for GS. 1215 works for me.  Just another guys opinion.

velobabe's picture
WATCH Simon Johnson: Find, Fund Candidates To Beat 'Corporate Nonsense'


this is good, except you have to look at dimon's face.


say the least, simon was pretty busy last night, looks like you were too.

WATCH Johnson On Bill Maher: Broken System If Goldman Investor Avoids Charges

holy heck batman, this dude owns a mansion right next door to david bonderman.

Russian billionaire Roman Abramovich's mega-yacht Eclipse

PHOTOS: $500 Million Yacht Sets Sail
Hulk's picture

Well put Chindit13, its not doom and gloom, its reality that we all had better figure out how to deal with before it comes down.

Couple all your thoughts with peak oil, the end cheap energy, and one can easily see that no recovery is possible.

We are living at the most critical inflection point in human history....Our delusional thinking and corrupt behaviour has destroyed us...as has our not understanding of basic math.....


cougar_w's picture

The crime of unbridled greed is being compounded now by misdirection, inaction and propaganda from world leaders, including the POTUS.

We could have used this time to prepare our cities, states and support infrastructure for the coming calamity. But we did not. Epic fail. The worst case scenario has been realized, and like Chindit above I fear that even saying that is leaping optimism.

cougar_w's picture


Brilliant synthesis of the salient facts.

Typical of chindit.

tom a taxpayer's picture

Excellent, chindit13,...heaping doses of reality.

dark pools of soros's picture

so did you make huge bets that had to be backed by their taxpayers or were you just window shopping???

Bear's picture

It is cool to be 'the Bear' ... thanks for the affirmation


jdrose1985's picture

I realize P/Es are out of this world currently but i feel many posters here claming 'DJIA 3000' by end of year are simply perpetuating the crazy semantics of a few even crazier folk.


Who said "by year end"? I'm looking at 18-24 months. I'm not prophesying and i'm not even capable of crunching these type of numbers myself. I'm just sticking with the numbers of the very few and hard to find people who have been calling this thing correctly all along.


When you realize that the entire boom/bust cycle is artificial and instituted by certain religious entities who are pulling strings behind the scenes (aka globalists, faces you are extraordinarily familiar with), you will begin seeing things in proper perspective. These power structures never die and government simply their tool of artificial inflation and debasement (volatility). Revisionist history/misinformation is the greatest ally of these "immortal" structures.


Just look at the "coincidences" surrounding the rise and fall of Enron as a prime example and it may take you on a trip you wish you had never taken. There is no greater and uneasing burden than the truth.


The internet is the first chance the hens have been given to beat the fox at his own game. Zerohedge and other sites are the embodiment of this opportunity and I can only wonder how much longer we will be allowed to freely exchange information such as we currently are.


The crash will not be finished until the newest (high-speed railroad) industrial revolution begins in earnest. Look for it and if you're not one of those writing the rules, avoid the speculative markets until we "break on through, to the other side".








Alienated Serf's picture

ha, i am always over there too.  would love to see reinhart here

jdrose1985's picture

Alienated Serf I've recently posted a couple of links to Reinhardt's Journal here hoping to send some people his way to spread the knowledge.

Even the free site is a world of information well worth diving into. The sub site is cool but probably a little more than somebody such as myself needs, but it's interesting to see the worker drones airing dirty laundry in real time ;)


A Nanny Moose's picture

Always more ice than meets the eye.

cougar_w's picture

... and it's the ice under the water that hits you below the waterline and sends you augering into the deeps.

Socrates's picture

peter Eliades was so astonishingly wrong on this rally up to 950 that I cancelled my subscription. In April and may off 2009 he thought we'd have a brief rally and collapse.

cossack55's picture

We are too jaded?  Hmmm.  Could that be because, oh, I don't know, we pay attention.  I would'nt confuse a jaded oulook with a objectivist view of reality. A is A.  But I do concur with your predictions, though you may be a little less jaded than I.

rubearish10's picture

There's enough hatred of GS that this could get some legs and sustain a downturn. Also, should there be further cases against other IB's, I think the valuations could get slashed for sure. With that, a "Goldman Contagion" perhaps could ensue with additional support of Greece, Portugal, China R/E and a few more disturbing US economic reports. There you go, SPX 666 here we come.... 

rubearish10's picture

Yeah and maybe we're being conservative on that call. Beale could be more accurate w/333 call, hee hee LOL!

Crime of the Century's picture

That's why Denninger carries SPX 210.23 on his banner every day...

Bear's picture

If the EU can pin its problems on GS ... what a ride!

Alienated Serf's picture

wait, the EU blame Americans? no wai!!!

sheeple's picture

GS = mirror image of Drexel Burnham Lambert

SRV - ES339's picture

Too early for S&P 666 CD!

November is too important to let it crash now (after all that hard work over the last year)... DOW 10,000 (again... we all should have invested in those damn caps) looks like a sure thing though.


Howard_Beale's picture

Perhaps you don't remember the market from 2008--the elections had nothing to do with what the market did. Sure, it rallied a tad into election day, but look at the chart. http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=djia&sid=0&o_symb=djia&freq=1&time=9

The market is bigger than QE, politicians, and everything else. No way we rally into November unless it's a bounce off an October low.

Fazzie's picture

CD, I too noticed a huge full court press on the pumping front.

The usual elements, biased interpetation of economic data, ominous news ignored, media pumping the market and predicting smooth sailing for at least another qtr. Lately though they ratcheted up the BS several notches to the point you would read a cnbc headline that screamed earnings beat, and would be an outright lie, were it not for the actual numbers they sheepishly buried several paragraphs into the article which indicated it was actually a miss! Every positive was trumpeted as evidence that full recovery was imminent and the feds magic was getting results, and every negative was given a convoluted excuse. Snowstorms, Easter bunnies, whatever. Just when even folks here at ZH were about to throw away the tin foil hats and go long citigroup, a black swan in its own right, actual SEC action against the squid itself, swims onto the scene! Timing is kinda suspect, OPEX day of course, after everyone loaded up on zombie bank calls; the "rally" had tortuously been propped and stick saved to the point where just about every greater fool that could be created had been; Dodds financial "reform" (sans actual reform) needing a boost along with the Messiahs sagging popularity ratings. All seems kinda staged, at any rate Im crying no tears for the squid, cnbc can take heart they have probably allready decided Gods work now entails shorting the bejesus out of everything, including the stuff the taxpayers have a stake in. Me, Im ridin with the squid! Im short a bunch of overvalued stocks for awhile anyway. I know the melt up can resume at any time the zombies and the fed decide it shall, so stops are in order. I think Im finally catching on and damn, that little abacus cdo swindle really isnt a pimple on the ass of corruption that has become the status quo.

Fazzie's picture

Damnit, I had that long winded drivel relatively readable with nice paragraphs!


Computer took them away!!

After I was proud of nailing the capcha in just two tries!!

cougar_w's picture

But without the paragraphs gives it a kind of edgy "stream of thought" effect.

Next time, leave out the punctuation and the CAPS. True art should not be easily accessible.

velobabe's picture


After I was proud of nailing the capcha in just two tries!!

me too, now i know who to call for 911. math savvy, chinthe and howard†

yipcarl's picture

Nice post Fazie.  I 100% concur... WELL SAID.