At last week's Senate grilling of Goldman Sachs, I wassomehow reminded of a scene in one of the Pink Panther movies when the bumblingInspector Clouseau asks a passerby if his dog bites.

"No," comes the reply and as Clouseau attemptsto pet the animal, it extracts a chunk out of his finger.

"I thought you said your dog does not bite?"asks a now incredulous Clouseau.

The stranger calmly replies, "That is not mydog."

You had the feeling that the Senate panel, whichquestioned Goldman executives for more than 11hours house on allegations thatit committed mortgage investment fraud, possessed little knowledge of thesubject matter, nor did it apparently bother to do even basic homework onsubprime investments.

The hearing was essentially to determine if the giantbanking concern sold an investment in subprime mortgage securities that wasdesigned to fail, thereby helping a big client who was shorting theaforementionedinvestment.

The SEC, which apparently took a much-needed hiatus fromporn surfing, has since charged Goldman with fraud.

Panel chair Carl Levin, D-Mich., sporting perhaps theworst comb-over this side of diners feasting on the early bird special in BocaRaton, appeared to take an almost pre-pubescent delight in repeating ascatological reference taken from a Goldman email that described a deal thatthe investment banker was pushing on clients.

More evident was his blatant unfamiliarity between theroles of a "market-maker" - a person who prices assets for clientsand "investment advisor," who has a client fiduciary duty.

Levin and his colleagues scored some points here andthere but failed to hurt, or even stagger, Goldman Chair Lloyd Blankfein andcrew.

I'm not going to opine on Goldman's guilt or innocence,that's for the SEC to decide later in the year.

However, even the inquiring Clouseaus were able to somedegree ferret out some of the root causes of the financial crisis - too manybad mortgage loans, underwriting that was essentially guideline free, and therating agencies bestowing preposterous grades to the loan pools.

Then may I make a suggestion?

Perhaps the panel should focus its attention where it'sdeserved on Fannie Mae and Freddie Mac, and reversing years of covering up forthese scandal-plagued entities that did little more than offer reckless housingloans.

Levin in fact was quoted as calling the entities

"an American symbol of financial success andaffordable housing."

Having this cadre as a driving force in writing financialreform regulations is like asking Inspector Clouseau to rewrite the policeprocedure manual.

 

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