Only days ago I wrote about CEO Lloyd Blankfein's phoney Mea Culpa, insuring Goldman's clients that the bank wasn't betting against them. Now it turns out that that is exactly what Wall Street's most successful bank has been doing.  Blankfein's assurance had the ring of the old saying, "The lady doth protest too much"! Or, as the early pioneers in their wagon trains heading West used to say, "The fox that finds it, the smell lies behind it!"  chortles Mrs. M.

Wouldn't it be wonderful if we saw justice at last, and these Masters of the Universe got their just desserts?  The Goldman wizards have solved the mystery of alchemy:  like Rumpelstiltskin, they have learned to spin gold.  It's easy, if you spin it the way Goldman does:  spread a rumour that a bank was crashing, then watch as it crashes, and then buy the shares at rock bottom and make a fortune as it goes back up!  This failsafe technique left the likes of you and me destitute, but made Goldman brokers richer than Croesus.  Goldman then had the nerve (some would say b---s) to say their greedy gamble was good for the economy, and that if banks had become weak they deserved to be brought down. What about the bank's customers and investors?

The welcome news now filtering through is that the US Securities and Exchange Commission (SEC) is charging the investment back with fraud.  Three cheers...let's hear it!  Hurrah, Hurrah, HURRAH!

As Carl Mortished said in the Money Section of The Times when the news broke, "We have been waiting for this priceless moment...evidence that the collapse of Wall Street and the City of London was not the work of bumpkins but of blue-chip conspirators."

I personally hope to see these guys in chains!

And it seems that Goldman has been in bed with the greediest of hedge funds, Paulson & Co.  Many of us will cheer when Paulson gets charged.  John Paulson is the guy who has creamed off $20bn during the credit crunch, betting against all of us.  It's obscene to earn $20bn while everyone else is losing his shirt.

It is alleged that Paulson & Co. created damaged mortgage-backed securities while at the same time betting against them in the market.  So Goldman has been selling its' investors rotten securities and then betting against them, thus defrauding clients and setting them up. The security in question is Abacus, which according to the allegations was stuffed with poor quality mortgages.

It's like an old fashioned gangster movie, except the villains are buttoned-down Harvard Business grads, who populate the world of big bonuses, big intellects, and the boardrooms of global institutions and national treasuries. Wow!  The smoke over the gun forms the letters:  Another Enron.

Apparently knives are being sharpened to feast on Goldman's entrails along with those of investment banks and hedge funds.  That's what you get when you trick investors into spending millions on a rotten mortgage product.  Even Goldman with its disdain for public opinion will wilt under the exposée of creating a mortgage-backed product that they doomed to fail by purposely filling it with risky loans to poor people.

Not only that they lied to investors about the types of mortgages the product contained.  Investors and banks bought the product, causing them to lose more than $1bn.

It's bewildering when you hear that Paulson will not be charged. Paulson also made  $1bn from its deal with Goldman.  Paolo Pellegrini, formerly of Paulson, was the whistle blower, providing the SEC with information about the deal with Goldman.

Of course, Goldman calls the charges "completely unfounded in law and fact," but Goldman shares are dropping fast. Whoopee!  How will they defend selling their own clients rotten products while simultaneously betting with Paulson that these products will fail?

Chris Whalen, an analyst at the IRA Advisory Service, said, "This litigation exposes the cynical, savage culture of Wall Street that allows a dealer to commit fraud on one customer to benefit another."

One interesting person to watch will be Warren Buffet, the Oracle of Omaha, who put £5bn into Goldman, thus helping it to weather and even profit during the Crunch.

Buffet is known for his sterling character and won't want to be involved with any shady deals.

Well, well, well...let's see what happens next.  Fried Squid anyone, or is the Squid as rotten as its deals?