Is Goldman Sachs Going Down?

May 3, 2010 (LPAC)—Lyndon LaRouche said on Sunday that he is convinced that Goldman Sachs is going down. "They can't save Goldman Sachs anymore. They are too exposed, too covered in filth. So, in my estimate, is that Goldman Sachs is going to be killed off. The ongoing criminal investigations provide the perfect context for bringing Goldman down." In addition to the SEC civil suit, and the criminal probe by the U.S. Attorney in Manhattan, the British Financial Services Authority is also conducting its own investigation into Goldman Sachs' dealings with the Royal Bank of Scotland, and other clients that took a big hit in the mortgage blowout, while Goldman profited off of short positions.

Indeed, The Independent on Sunday reported that a number of big Goldman Sachs clients are getting set to cut their ties. The paper reported that "Capricorn Investment Group, one of the world's biggest family offices, could break its relationship with Goldman Sachs following accusations by the U.S. financial watchdog that the firm misled clients over mortgage trading. The California-based firm is the first big client known to be reviewing ties with the investment bank in the wake of the fraud allegations which stunned the financial world, but dozens of others are said to be reconsidering their relationship."

The report about Capricorn severing ties to Goldman Sachs is deliciously ironic. Founded by eBay founder Jeff Skoll, who bankrolled Al Gore's agitprop film, An Inconvenient Truth, Capricorn handles a sizeable portion of Gore's own $35 million investment in hedge funds. (Gore and ex-Goldman Sachs trader David Blood have their own London-based hedge fund, Generation Partners, which is heavily staked in the carbon futures swindle.) The falling out between the Gore/Skoll gang and Goldman Sachs is one further indication that the Wall Street giant is headed for doomsday. In the wake of the Levin Subcommittee hearing last week, and the Justice Department announcement of a criminal probe, comparisons are now being made between Goldman Sachs and both Drexel Burnham Lambert and Arthur Andersen. Both companies went down, after scandals erupted and Federal criminal probes were launched. Drexel was at the center of the blowout of the savings and loan industry in the late 1980s and early 1990s, and Andersen was caught up in the Enron debacle a decade later.