Posted by Karl Denninger
Gee Darrell, you don’t have a wee problem with your constituents and trying to pump the value of their houses (which were inflated by massive, pervasive and continuing fraud), do you?
Rep. Darrell Issa, the top Republican on the House Oversight committee, is demanding a slew of documents from the Securities and Exchange Commission, asserting that the timing of civil charges against Goldman Sachs raises “serious questions about the commission’s independence and impartiality.”
Issa’s letter, addressed to SEC Chairwoman Mary Schapiro and signed by eight other House Republicans, asks whether the commission had any contact about the case, prior to its public release, with White House aides, Democratic Party committee officials, or members of Congress or their staff.
“[W]e are concerned that politics have unduly influenced the decision and timing of the commission’s controversial enforcement action against Goldman,” Issa writes.
You know how I know it’s utter crap?
Folks, I’m all for a good insider-trading story – if there was actual evidence of insider trading – that is, if there was evidence that someone knew in advance what was going on and placed bets to profit from what, in that case, would be a sure thing.
But in this case, despite the claims of many, there is no evidence to support that charge to be found in the tape. Indeed, quite the opposite – the options chain looks entirely normal.
Now remember folks, it is entirely legal for Congressfolk (and their staff) to trade on inside information. They do it all the time, as has been disclosed by various Congresspeople themselves.
IF there was any sort of coordination between the SEC’s action and any member of the “Democratic establishment” it would have shown up in the trade either Thursday or Friday and it did not.
Some of those options had truly obscene returns – the $170 April PUTs, for example, were worth $15.00 at 11:00 AM Friday and under $2 the day before, or a gain of 750% in less than 24 hours.
Clearly, if someone had been tipped in the Democrat political establishment that is immune from insider-trading regulations, including the members of Congress and their staffs, it would have shown up in the market as have dozens of other questionable decisions you have NEVER seen fit to investigate – and it did not.
(Other examples over the last couple of years include the SEC-imposed short ban, the discount rate cut in 2007 and many more – shall I compile a full list or are those two enough? Oh, and why is it that you’ve shown no interest in stomping on those clear cases of “inside baseball”?)
Commentary by Stephanie Jasky
In other words, if this move by the SEC had truly been orchestrated with the administration, there would have been clear evidence seen in the markets’ movement on Thursday or Friday, but there wasn’t. I can’t tell you how many countless times as traders we have watched Congress and the large banks trade on inside information. It’s obvious and it’s blatant.
Now, if Mr. Issa is angry that the SEC didn’t move sooner on this, and let’s be honest here, FedUpUSA and a myriad of other financial and economics people on the Internet have been calling for Goldman Sachs’ head on a platter for more than two years, then Mr. Issa is certainly within his rights to complain about the apparent complete absence of the SEC over the past 10 years! However, that’s not exactly what his letter conveys.
I certainly hope that the Republicans will think twice (or more) about this new tactic of defending Wall Street. They THINK they’re defending capitalism, but they aren’t, and the American people know it for what it is: defending criminality and defending the oligopoly between the Congress and Wall Street. And I’ve got news for the GOP: Wall Street is in far deeper to the Democrats than they ever were with you. Goldman Sachs and those that identified themselves as working for Goldman contibuted $1 Million to Obama’s campaign, more than any other candidate for any other office combined. The American people do not want to see anyone in Washington DC stand up for Wall Street’s globalized, premeditated theft.
Before now, it appeared that nothing short of a horrible blunder of epic proportions would prevent the Republicans from taking back every seat in Congress they’ve lost in the past four years – leave it to the Republicans to find just that blunder.
STOP THE LOOTING AND START PROSECUTING! Can you hear us now?!!!!!