The View From 1776

Fiduciary Responsibility and Judgment vs. Caveat Emptor

Right or wrong, the charges against Goldman Sachs highlight divergent standards of banking.

Posted by .(JavaScript must be enabled to view this email address) on 04/24 at 12:20 AM
  1. A high school teacher asked the class to use the word "sacks" in a sentence to illustrate its use in describing pillaging and looting.

    A student raised his hand and offered, "Goldman Sachs."

    The SEC action in the news accuses Goldman of not only betting on both sides of a security (hedging), but going far beyond that. Goldman is accused of finagling with Mr. Paulson to select particular mortgage bundles for these securities that were doomed to failure, so that he could profit by betting against them (shorting them).

    Apparently, neither the securities ratings agencies nor the dupes buying the securities, who believed in Goldman's reputation for straight dealing, knew that Paulson had his thumb on the scale, and that the fix was in.

    It will be interesting to see House Minority Leader McConnell trying to defend this behavior as just "business as usual."
    Posted by .(JavaScript must be enabled to view this email address)  on  04/25  at  05:19 PM
  2. You're all over the map on this one, TEB.

    For one thing, it's my understanding that the Obama admin includes several GS execs, so if they're pointing fingers, some of that pointing is back at themselves.

    In any event, whether pushed into it by the congress-critters -- Waters, Frank, etc. -- or they jumped into it on their own, there were some unsound and not totally honest deals being carried out on Wall Street and in international financial markets, and the most guilty seem least likely to face the consequences, and have, instead, taken the money and run while throwing up as much sand and dust as possible to cover their tracks.
    Posted by .(JavaScript must be enabled to view this email address)  on  04/25  at  05:56 PM
  3. Yes, indeed, there were and are a lot of Goldman Sachs alums in the government, including Henry Paulson, Bush's Secretary of the Treasury who was head of Goldman before joining Bush in the White House.

    That is beside the point, however. The financial segment clearly needs to have more regulation to prevent a recurrence of this disaster. How ironic that the current crop of Republicans in Congress are fighting this tooth and nail - and to what end?
    Posted by .(JavaScript must be enabled to view this email address)  on  04/26  at  04:43 PM
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