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Commentary

Matt Taibbi And The Goldman Saga

Goldman Sachs, in my opinion, has started its descent. For years, it has been out there, surviving crisis after crisis, managing to make tons of money and pay handsome bonuses even in tough years. It’s built a solid house – nearly everyone in a top-level economic position in the US seems to be from Goldman. But that foundation seems to be rotting now, and the cracks in the wall are getting more and more evident.

Matt Taibbi has a great piece on Goldman (scanned in by Zero Hedge)
Taibbi-Goldman-Sachs
(Btw, Goldman countered, and Taibbi replied with another scathing column)

Tyler at Zero Hedge has done a great job exposing chinks in the Goldman armor, and so has Mike Morgan at http://www.goldmansachs666.com. Goldman seems to feel it – the oldies are closing ranks and keeping lids on data, and pursuing random legal options to keep such sites at bay. But there’s too much out there known already.

Read the article – from market manipulation to blatant disregard for the rules and ethics in the game, there’s stories of them all. (Oil will be at $100! Oil at $200! oh wait. Oil is now at $30? Frik, Oil at $75! ) Matt doesn’t spare the ex-Goldman ex-Treasury Secretary Paulson either, and has scant respect for the insiders of all the big banks.

It seems to me that Goldman could be the next Enron. There’s a lot of financial shit waiting to hit the fan – probably the worst kind since the Great Depression – and Goldman may just end up being a high-profile casualty. Or will they make it through this time too?

  • Anonymous says:

    >Deepak

    Are u serious about stuff like this?

    We live in a world where it is "caveat emptor". Why are u in the stockmarkets? To outperform the market. For every extra rupee u make some sucker somewhere is losing that rupee. Lets be clear u r taking that money out of somebody elses pocket.

    Goldman just does a great job at it. Maybe bending the rules, breaking them or writting them. Is it unfair yeah it is so is life.

    The Ambani's have done that for years in this country. They dont break the rules they change them. Reliance power was such a con job. Are u suggesting to me that the Ambanis will go down the way u r saying Goldman will.

    It doesnt work like that in the real world. Unless u r hoping that Che Guevera rises out of his grave and does a marxist revolution in the US.

  • Deepak Shenoy says:

    >Anon: Dead serious. Markets are good, but not manipulation, although it is rampant. Btw, The Ambanis HAVE gone down considerably, and there is more trouble in the offing for both brothers – though they are not yet in Goldman's position of being detested that much.

    We don't need a marxist revolution – it's just that when you manipulate you end up hitting the line between "legal" and "fraud"; but if you have the contacts and the lobby you survive. but once public opinion gets against you, you are easy pickings because you straddled that line. Look at Enron – it went borderline for years, and then hit a wall, largely because it pissed off a large section of people.

    Goldman seems to be at the stage where public opinion is stacking up against them. It will have to be seen if they survive it or not – I may be wrong, but it could the beginning of the end.

  • Anonymous says:

    >Public opinion is not some guy writing for the " Rolling Stones" magazine.

    If I hear Roubini saying this I will value it. I would weigh Buffets investment call more than what this guy says.

    America is full of guys on the other side of the divide who will rant. I am sure u and I have seen enough movies about how large corporations are steamrolling common ppl.

    Enron hit the wall when it ran out of money. The skeletons then came tumbling out.

    If u r suggesting the Ambani's are going down then I dont think u understand how the business-politician- bureacracy works in this country.

    Public opinion is about finding the bad guy when the system crashes. We love it we root for the underdog. Thats how the world opinion works but doesnt mean thats how the world works.

  • Rashmi says:

    >Yes Goldman does a better job at its trading program too. It has more than 50% of program trading vol. on NYSE.Now NYSE is gonna allow members to not report their DPTR vol data.Great news isn't it. This is worse than Madoff.
    Roubini is an economist not a trader. Buffet has direct interest in BOFA, wells fargo and goldman. So if a journalist does his research and posts it. I think it has a value. Then there is Mr. William Black former Director of the Institute for Fraud Prevention and tough regulator during S&L crisis spoke out against banks here http://www.pbs.org/moyers/journal/04032009/watch.html (video and transcript).
    There is a powerful bank lobby here which donates money to political campaigns which in turn ties hands of politicians.

  • kvv says:

    >Surely you're not blaming GS analyst calls for oil going to 150? Which analyst hasn't frantically upped estimates with rising security prices and lowered them with falling prices? As if markets get moved into huge trends based on analyst calls. Are you buying commodities/stocks based on GS analyst calls this year?

    Secondly, objectivity is required when evaluating blog posts. Zero Hedge's opinions range from the ridiculous to interesting. He does post valuable data more often than not but I have found his opinions biased towards jumping to conclusions and conspiracy theory. Seeking Alpha while republishing a lot of his articles has rejected some due to gross inaccuracies. Various other bloggers have had genuine issues with some of his posts. For e.g.;
    Article on Tyler Durden at Dash of Insight

  • Anonymous says:

    >Thank God.

    The reporters are not reporting that the delayed rain was also caused by goldman.

    Excellent tabloid reporting.

    Goldman rules the world.

    Come on deepak this kind of articles are just for timepass.

  • kvv says:

    >Some more comments. I realized I ended up sounding like defending Goldman in my previous post when really I was just asking for objectivity when reading sensationalist sources like the one's referenced.

    One can argue that there is a financial oligarchy in the US. But, a far better article is former IMF chief economist Simon Johnson's article on this:

    The Quiet Coup

    Anonymous, the writer's credentials (better than Roubini) should satisfy you.

    There needs to be way more transparency and accountability in the offices of central banks, treasury secretaries, regulators, lawmakers.
    For e.g. one proposal is to have laws that disallow regulatory/central bank/treasury appointees from working in the private sector in future and vice versa or something to that effect (like is done in the judiciary) – that would go a long way towards fixing the problem.

    Looking at the way things are today… maybe, it would take another crisis with the decline of Goldman to get it done.

  • Deepak Shenoy says:

    >I'm not particularly into credentials. People such as Calculated Risk, Barry Ritholtz and even Zero Hedge have done some great work in getting data together; and I like to take the argument, not the arguer into consideration.

    I find credentials particularly irritating – people with fantastic credentials have just ruined the world.

    One might think "sensationalist" when it comes to people like Taibbi – I say use your discretion. Some statements are obviously made in fits of rage or blabbering, and we're intelligent enough to know what is fact and what is blabbering. The facts – and the ability to cross verify (both Matt and ZH provide sources).

    KVV: thanks for Simon's article, very useful! Shall post.

    Note that I'm not saying Goldman SHOULD fall, or that it is a worse ethical player than the rest. Might end up that everything is just as rotten; the point is that there is a lot of disgust starting to get mainstream. Goldman with it's ex-officers all over the regulatory administration is at the receiving end of that disgust. Early days, of course.

    Crisis wise there's enough out there waiting to hit the fan. CRE blowout, Option ARM resets, leveraged loans, and later Social Security, Medicare and Medicaid.

  • Anonymous says:

    >Kvv, Deepak

    I am not saying that credentials will make me change my mind. But it would stupid on my part to sit up and reach a conclusion based on somebody's rant who doesnt have credentials. I m not defending Goldman's actions and i agree that there has to be some serious changes in the system.

    But to reach a conclusion that Goldman will go down based on a note that somebody has put across who in his note calls John Thain a "asshole" ( He could be but this is not unbiased reporting) is something beyond me.

    As somebody put it this is tabloid reporting. I would not be commfortable in basing my world view on what comes on a AAjtak or a star news as opposed to NDTV and CNN IBN.

  • Rashmi says:

    >Watch author of the article Matt Taibbi's video interview here.