Stop Blaming Home Buyers!! Senate Panel Blames Wall Street Crash on Goldman, Banks, Lax Regulation and the Push to Sell Risky Loans.

Republicans won’t like it, but it wasn’t poor people buying homes, or Fannie and Freddie, that crashed the global economy. Shocker: It was the banks and free market Randian regulators. Bankers even appeared in congress and lied, a violation of law, to thwart investigators.

Announcing the findings of a Senate panel investigating the financial crisis, Senator Carl Levin (D-MI) called Goldman Sachs “a financial snake pit rife with greed, conflicts of interest, and wrongdoing,” adding that C.E.O. Lloyd Blankfein should possibly face perjury charges. 

[Washington Post] Goldman Sachs misled clients and Congress about the firm’s bets on securities tied to the housing market, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis said. Senator Carl Levin, releasing the findings of a two-year inquiry yesterday, said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value. 

Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue. “In my judgment, Goldman clearly misled their clients and they misled the Congress,” Levin said at a press briefing yesterday where he and Senator Tom Coburn, an Oklahoma Republican, discussed the 640-page report from the Permanent Subcommittee on Investigations. 

Much of the blame for the 2008 market collapse belongs to banks that earned billions of dollars in profits creating and selling financial products that imploded along with the housing market, according to the report. The Levin-Coburn panel levied its harshest criticism at investment banks, in particular accusing Goldman Sachs and Deutsche Bank AG of peddling collateralized debt obligations backed by risky loans that the banks’ own traders believed were likely to lose value. The panel’s report also examined the role of credit-rating firms in the meltdown, lax oversight by Washington regulators and the drop in lending standards that fueled the mortgage bubble and ultimately caused hundreds of bank failures.

Even right wing loon and political partisan Sen. Tom Coburn sounded like an activist liberal:

The subcommittee’s findings show “without a doubt the lack of ethics in some of our financial institutions who embraced known conflicts of interest to accomplish wealth for themselves, not caring about the outcome for their customers,” said Coburn. “When that happens, no country can survive and neither can their financial institutions.”

Yet Coburn and his fellow Republicans are trying to repeal Wall Street reform. Go figure.