As stated in the Foreword to Sabotaging America ".... the market had become one that was free to be manipulated on a colossal scale ..." The SEC have now charged Goldman Sacks with defrauding investors . Goldman has denied all wrongdoing. The charge is that Goldman permitted John Paulson to hand pick which mortages to package up to sell to its investors. Paulson knew that the sub-prime bubble was about to burst (see page 5 of Sabotaging America). Note that John Paulson is not related to Hanry Paulson who was Treasury Secretary at the time. Paulson made about $1 Billion in these transactions for his Abacus hedge funds.
London based Goldman employee Fabrice Tourre was instrumental in setting up the Abacus hedge fund. SEC charged that Goldman did not tell the mortage investors that Paulson had bet against them . In the event, the investors lost approximately what Paulson made, that is about $1 Billion.
It is high time that some of the banksters went ot jail.
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