Putting On My Tin Foil Hat

Okay, this is a wild conspiracy, but just hear me out.

The administration wanted to fight against rising medical device and drug prices (and get health care reform passed over industry objections). Suddenly there are antitrust investigations in a couple sectors of the med-tech market (immunohematology, plasma-derived drugs) and rumors of sniffing around for more (hospitals, drug companies, ICDs). The administration has also talked about revoking the antitrust exemptions for the health care insurance industry.

The administration is going after seed companies (specifically Monsanto), is rumored to be looking very carefully at the transport sector, and has publicly warned the petroleum industry that investigations could come.

And now we have the Goldman Sachs suit. Now I don't know whether or not Goldman committed fraud, but having worked on the buy-side in fixed income during the credit crisis, I'm not the least bit surprised that there was self-dealing. I mean, it was basically accepted as fact that some of the brokers were shorting mortgage-backed securities (and related derivatives) while simultaneously creating, packaging, and selling them to investors.

This shouldn't be a big surprise to anybody; these are the same companies that cheerfully banked miserable tech companies in the late 90's, sold them to investors with glowing research reports, and made sure they didn't get caught long on their trading desks because they knew they were crap.

So, anyways, is it fair to wonder whether the Goldman suit is a blunt instrument of policy aimed at telling Wall St. "back off on opposing reform, or we'll nail you and embarrass you even further"? I mean, really, who is going to leap to the defense of those "damn greedy bankers"?

Like I said at the beginning, this is just mostly gonzo conspiratorial theorizing on my part. After all, the Bush administration was uncommonly lax when it came to antitrust investigations and enforcements (in terms of the number of cases pursued compared to past administrations). So maybe we just have aggressive new people in place, and maybe they're making up for lost time and overlooked sins.

Or ... maybe not. Maybe this is how business is going to be done for a few years -- we'll ask you to cooperate, then we'll send a shot across your bow.

Time will tell...

Disclosure - I own shares of Monsanto.