26 04 2010

Authored by William Robert Barber

Recently, as if writing the plot and circumstance of a Greek tragedy, the Obama syndicate of dreamers consorted with a number of Middle Eastern voices within, as well as outside of the Clinton state department. The idea was to cause an incident to rile the Israelis and appease the Muslims. The administration picked the construction of apartment buildings in East Jerusalem as the item of contentiousness. Well, the Israelis were indeed riled up but the Muslims remained non appreciative; Obama and Clinton managed to alienate our only allies in the region without advancing the cause of peacefulness one iota.

Not only does this Obama-Clinton policy offensive against the Jewish state not appease the Muslims — this policy of silliness emboldens Israel’s enemies. This foreign policy snafu infuriated members of congress; it irritated pro-Israeli advocates while wasting valuable time and energy for all parties involved. Contrary to the Obama-Clinton policy of enacting fair mindedness, Hezbollah interprets the idea of even-handedness as weakness; this particular American intuitive simply validated the aggressive foreign policies of Syria and Iran.

The issue of paramount concern of this almost ageless conflict is that the Palestinians of Hamas or Arafat persuasion (as does Israel) claim Jerusalem as their capital. The Palestinians are not concerned with Jewish settlements in Jerusalem; they are concerned with Jews in Jerusalem. So settlements or no settlements, the radical elements of Hamas or Arafat persuasion will never accept the sovereignty of Israel, much less settlements in East Jerusalem. Israeli settlements are inconsequential to the issue of concern.

“The SEC vs. Goldman the Abacus 2007-ACI”

Now, this is crazy. The participants are John Paulson, a hedge fund investor, security firm ACA Capital Ltd., and Deutsche Industriebank AG, a German bank, otherwise known as IKB. Notice, all are sophisticated investor institutions who, at their own discretion, willingly and willfully decided to create a “synthetic” (meaning no actual tangibles were involved; the CDO was designed as a future value of certain mortgages) collateralized debt obligation (CDO).

The issue as the SEC declares it: Goldman had an obligation to disclose to the Paulson counter parties, who were betting long, that their counter party, who was betting short, was indeed John Paulson, a hedge fund investor. The agency also alleges that Goldman deceived ACA Management (a unit of ACA Capital ltd.) into believing that Paulson was actually betting/investing in an “equity” tranche on ACA’s side of the deal. Interestingly, however within the terms and conditions of the offering document, it clearly states that an equity tranche was not offered by Goldman. So, either no-one read the offering document, or the proper disclosure was read and, as indicated by their signature, affirmed.

Imagine that the SEC charges that Goldman was responsible for ACA’s “misimpression” that Paulson wanted to invest in the deal. To add injury to insult, the SEC piles on the allegation that ACA executives were not aware that Paulson intended to make bets against the portfolio. So — Goldman is responsible to do all the thinking for ACA??

What scares me regarding this lawsuit is its precedence. Normally, the SEC tries to settle before suing. In the great majority of such enforcement, the vote on the board is unanimous… in this case, it was divided along party lines. So the overriding assertion is that the agency’s motive is nothing less than more power. Therefore, by pressing this lawsuit at this particular time, the SEC helps the Democrats pass the Dodd Bill, regulators gain more funding and more people; indeed, more of everything, except the surety of more diligence and competence.

Fannie and Freddie have cost taxpayers around $400 billion; in 2005 Obama and Dodd voted against proposed tough regulatory legislation for the double F’s. These government-sponsored Enterprises — which had been acquiring increasing numbers of subprime and Alt-A loans for many years in order to meet their HUD — imposed affordable housing requirements and accelerated the purchases that led to their 2008 insolvency. Amazingly, Obama, as a Senator, was the third largest recipient of campaign contributions from the double F’s only behind Senators Dodd and Kerry.

Now, all three of these hypocrites are damning private enterprise as immoral; no wonder the American people trust neither the government nor their politicians.

Well, as often said and always, the result is that we do get the government we deserve…




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