The Senate has No Idea What It is Investigating when It Comes to Goldman Sachs

"It is becoming increasingly apparent that a terrible wrong may have been done to Goldman Sachs," bank analyst Dick Bove writes in his latest note.

A Senate panel has accused Goldman executives of lying during earlier Senate testimony regarding Goldman's trading of mortgage backed securities during the financial crisis.

In particular, Goldman CEO Lloyd Blankfein testified that Goldman short positions on the U.S. housing market were hedges against long positions.

The chairman of the Senate investigations panel, thinking Blankfein lied, referred the case to DOJ.

But, according to Bove, "Evidence is now mounting that the company did not have a net short position at a crucial time under study, and that the Senate Committee may have misread the numbers,” Bove writes in his note.

Of course, the real problem with all this is, as a market maker, there is nothing wrong with Goldman having a net short position, while selling long positions to its clients. This is routine activity for market makers.

What is a problem, but which is not being investigated, is Goldman's trading with the Federal Reserve. I am told that the Fed shoveled money into the pockets of Goldman and other elite bankers, by allowing Goldman to charge huge prices when trading with the Fed, which allowed Goldman,and other banksters, to pocket $$$.

The Senate investigation is looking more and more like some form of a limited hangout misdirection.