Late yesterday, the highly respected credit rating firm, Moody’s Investor Services, officially warned that if there is no imminent progress in Congress on the debt ceiling fight, the United States of America’s Aaa credit rating would be cut. Understanding that such a draconian event as a U.S. credit downgrade would infuriate voters; it should not come as any surprise that the media was distracted today over news that the Manhattan Attorney’s office happened to issue a criminal subpoena to Goldman Sachs for insider trading and securities fraud earlier this morning.

Goldman Sachs is the perfect scapegoat to blame for America’s credit woes. The firm is the largest investment bank in the world and its history of ethics violations are legendary. Goldman agreed to pay $550 million to settle Federal claims that it misled investors in a subprime mortgage product just as the housing market began to collapse. Essentially the company recommended to its individual, hedge fund, bank, and money manager clients that they make investments in sub-prime mortgages loans Goldman Sachs was betting were already failing. The settlement was among the largest in the 76-year history of the Securities and Exchange Commission, but it represented only a small financial hiccup for Goldman, which reported a profit of $13.39 billion for 2009, the worst period of the credit crisis.

» Is America on the Verge of Another Credit Crisis? - Big Government