A very important development occurred recently which received very little publicity in the American press. However, the repercussions of this event could prove to be either immense or it could be just another example of congressional posturing. As readers know, there have been considerable media reports about the reckless issuance of bonds backed by subprime mortgages and other kinds of derivatives. As a recent blog about a Brazilian downgrade of US Treasury Bonds noted, such “investment” items should never have been given high ratings. There have been many who have wondered in internet reports if open fraud was involved in the selling, rating and marketing of these now-toxic investment instruments.

The US Senate has decided to investigate several major Wall Street firms to look for evidence of such fraud. The first link reports that “Goldman Sachs Group Inc. and Deutche Bank AG were issued subpoenas by a US Senate panel looking for evidence of fraud in the 2008 mortgage-market meltdown.” It cites Washington Mutual/Morgan Stanley as other Wall Street firms also receiving subpoenas. The second link is the introduction to a subscription-only Wall Street Journal report on these subpoenas (the entire story could be found in a library subscribing to that publication). Naturally, the subpoenaed firms either avoided or declined comment. The July 31, 2009 issue of USA Today had a one-paragraph story on this event entitled “Goldman Sachs, JP Morgan Subpoenaed.”

It is worth noting that the Senate directly subpoenaed Goldman Sachs and other Wall Street mega-firms. The Senate did not rely on the US Treasury Department to do such an investigation. The third link below may give some insight into why the Senate has to rely on its own investigators and not the US Treasury. In an interview given by Dr. Paul Craig Roberts, a former US Assistant Secretary of the Treasury (a high position), he clearly stated his opinion that US Treasury Secretary Geithner works for the interests of Goldman Sachs, not the interests of the USA or its people (you can skip to the 2 minute mark of the YouTube video if you wish to hear this comment). As further evidence of the growing strain between Congress and the “Wall Street crowd,” I heard a radio report while in my car the other day that Treasury Secretary Geithner used the “F-word” and other expletives in an exchange with a Congressional Committee. It may have been on the Glenn Beck program or another radio talk show. You can do a websearch to find a few references to this event, but this evidence of growing strain between the legislative and executive branches of government was not widely reported to the American people.

Goldman Sachs recently reported incredible corporate earnings. If you refer back to my July 16, 2009 blog entitled “Goldman Sachs Seeks to Keep its Software to ‘Manipulate Markets,'” you will see the media reports that Goldman Sachs has developed a software program which reportedly can “manipulate” markets, not just predict them (the original story I saw came from Bloomberg News).  I wonder if the recent Senate subpoenas will also investigate whether Goldman Sachs’ “market manipulation” software was responsible for their remarkable market earnings. If Goldman Sachs has been using “market manipulation” software to manipulate markets to its own advantage, it would be an “insider trading” scandal which would make the Bernie Madoff ponzi scheme case look small by comparison.

The above stresses in the US and global financial markets are being downplayed to the US general public. However, someday these growing financial stresses will lead to a severe crisis which will fulfill the prophecy of Revelation 17-18 that the current global monetary system called “Babylon the Great” will collapse. We may have only months or we may have several years before this event occurs. But it will happen. When it does occur, it will likely occur very suddenly and unexpectedly to a shocked public.