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I’ve been extremely critical of Goldman Sachs. The bonuses, funded by taxpayer bailouts, teed me off. And back on January 2, I asked, What does $22 billion in Goldman bonuses buy? Now, I have a different concern:
Is the prosecution of Goldman Sachs going too far?
In the Senate chamber yesterday, our elected officials grilled reps from Goldman Sachs. The Senators illustrated, I think, the outrage felt by Americans over bailout dollars that turned into banker bonuses. Even if—Senator Carl Levin trash-talked with the kind of language that triggered FCC fines of shock-jock Howard Stern:
Is paranoia necessary to survive on Wall Street?
In one sense, Goldman Sachs is no different from any other investment bank on Wall Street. When it comes to protecting the brand, junior employees are expendable. Like goldfish, investment banks eat their young when self-interest make cannibalism seem rationale.
The dead bodies keep surfacing. It’s now clear the ratings agencies, who were paid for impartial evaluations of Goldman’s Abacus and other CDO deals, had serious qualms. Here are a few sound bites from internal e-mails quoted in today’s Wall Street Journal:
Over the long term, there are no such thing as secrets. Over the long term, everything is transparent. And today, The New York Times provided a few clues about why Goldman lost $75 million, when it knew mortgages were turning bad.
Who hasn’t seen the news? The SEC accused Goldman Sachs of fraud, alleging it misrepresented an Abacus CDO. Banks lost $1 billion on the trade. And John Paulson, one of the gods of Greenwich, pocketed $1 billion.
Here are three things I don’t get:
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