Contrary to the prevailing analysis, we believe that the Obama and Bush administration insistence on protecting banks at the expense of the taxpayer is the result of a Machiavellian effort by Goldman Sachs and other major banks to influence U.S. economic policy by infiltrating the corridors of power.

Today, we duly note that Goldman Sachs has just hired former Barney Frank staffer Michael Paese to be its top Washington lobbyist. This position was formerly held by Mark Patterson, the current chief of staff at the Treasury.

Pease and Patterson are not the only ones to pass through the revolving door between Washington and Goldman. Bush’s Treasury secretary, Hank “The Hammer” Paulson is a former Goldman CEO. And his replacement, Tim Geithner, was mentored by Gerald Corrigan, a former New York Fed president and current partner and managing director of the Office of the Chairman of Goldman Sachs.

Who else was President Obama considering

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Notes from the Investment Underground Monday, April 27, 2009 Palermo Viejo, Buenos Aires, Argentina

Welcome to Sopranos USA… Can the “junk-stock” rally last? Credit to get worse before it gets better… Feds’ “hair of the dog” recovery plan… Shockwave coming… Jim Rogers on why he’s not buying stocks… Introducing your new Notes tax expert, Raife Neuman… And more!

*** What kind of men have we entrusted to manage our economy? And whose interests do they serve? Get the answer to either of these questions wrong and you’re in for a rough ride as an investor.

*** Consider the facts surrounding the Bank of America’s takeover of Merrill Lynch.

Thanks to New York Attorney General Andrew Cuomo, we know that former Treasury secretary Hank “The Hammer” Paulson and Fed chief Benny “Two Fingers” Bernanke violated U.S. securities law by keeping the huge losses sustained by

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The government is banking on the American consumer to rescue the economy. But debt-ridden households have had enough, says Andrew Gordon. He says the government’s massive bailout are benefiting very few in the short-term. But the long-term consequences will be felt by all.

This from Investor’s Daily Edge:

The government’s latest bailout moves have me scratching my head. It’s throwing $200 billion worth of guarantees at recent and current loans tied to consumer and small-business spending.

Hank and Ben want the consumer to bail out the economy. And they want to do it by putting consumers deeper into debt.

They don’t get it.

They don’t get that consumers are tapped out.

What do they think when they see numbers that show that American households are in deeper debt than ever before? Or when they see that consumer spending in October fell the most in

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Thank God for Henry Paulson. Seriously, after two years of “strong dollar” policy—policy that saw the dollar lose some 16% of its value before this recent rally began—Henry the “Hammer” Paulson has really come into his own as a financial blunderer. Indeed, his actions of the last 18 months are much more deserving of the nickname “Hammer” than anything from his college football days—hammers are neither particularly sensitive nor precise instruments. In fact, a review of his actions throughout the financial crisis show a rapid shift towards weapons of greater and greater scope and power… none of which hit their target: stopping the financial collapse. Throughout much of 2007, Paulson asserted that the subprime problem was “contained” and that the global economy was the “strongest” he’d seen in his “business lifetime.” By the time he finally figured out things were not contained and ...

Still on the topic of the bail-out plan, guest contributor Bill King (The King Report) offers his ideas on how to put a more credible plan together. His thoughts are insightful and deserve the urgent attention of the powers that be.

Premises • The US credit system is broken. • The Paulsen-Bernanke Bailout Plan does not insure that those banks and brokers that receive bailout aid will increase lending. The reality is the market is hoarding liquidity and these banks are likely to do the same. More importantly consumer lending has been a small, often insignificant part of their business. They made money by trading and through securitization of debt. • It is necessary to create a new system parallel

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In the currency market, the dollar edged higher against the euro. Late Wednesday, the euro was trading at $1.4619 vs. $1.4645 on Tuesday. Traders were on pins and needles during the second day of Big Ben and Hammerin’ Hank’s hard sell to Congress about their proposed bailout plan.