U.S. Accuses Goldman Sachs of Fraud

[scandal 951]

From a WSJ articleon the topic:

Investors tried to figure out whether other firms or other structured finance products will be affected. They are concerned that the SEC's action may create a domino effect affecting other firms and other structured finance products. There's also the worry that this regulatory move may rattle the recovery and bring uncertainty back to the market.

...

"This is the beginning I hope of the recalibration of risk," he said, adding "the financial space is overcooked in terms of debt valuation."

I think those are the twin themes: On the one hand, we're still (rightfully) terrified that any attempt to finally come to terms with the CDO/CDS disaster are just going to destabilize the fragile economic recovery. Better to sweep it all under the rug .... On the other hand, we're never going to be able to move forward until we clear all the ####### off our balance sheets. "Recalibration of risk" is a fancy-shmancy way of saying we need to write down untold trillions of "assets" that have never been unwound, even in the bloodletting of 2008-09.

The S&P closed down 19.5 points today at 1192. Long awaited correction .. here we come.