The View From 1776
Fiduciary Responsibility and Judgment vs. Caveat Emptor
Right or wrong, the charges against Goldman Sachs highlight divergent standards of banking.
- 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.
- 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.
- 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.