Home > Uncategorized > Did Goldman Sachs [enter euphemism for LIE here]?

Did Goldman Sachs [enter euphemism for LIE here]?

cartoon from Dave Grandlund, davegranlund.com

Yesterday’s 10-hour grilling of Goldman Sachs executives in D.C. provided for hours of entertainment. You could actually see the strain in the Goldman folks’ faces as they tried to maintain blank stares and not roll their eyes. Senators accused the executives of formulating a strategy to streeeeeetch their response times to use up questioning time. The congressional panel’s senators did not refrain from vocalizing their frustration as the executives attempted to dodge straight answers to absolutely every single question. But, really, what did they expect? Since when is fiduciary responsibility and morality expected from Wall Street? We can’t even get it from elected officials.

It seems very much like Goldman Sachs took advantage of their golden reputation and information asymmetry to profit off of “less-sophisticated” clients. That’s pretty clear from criminalizing emails that lament the difficulty of making money from deals with hedge funds who “tend to be on the same side” as Goldman on bets and “know how things work”. It was great to watch an executive explain how HE interpreted that email. Creative interpretation. They really are artistic geniuses.

Goldman Sachs played a role in the financial crisis, but probably a much smaller role than government agencies who pushed for more people to become homeowners, mortgage lenders who didn’t even verify incomes before granting mortgages, the many institutions who securitized these loans and regulatory bodies who should have seen the crisis coming. Goldman, who likes to say that its record profits and enviable performance come from unmatched human capital, took advantage of its reputation to profit from clients who knew less about the products than they should have, and probably didn’t know that Goldman was betting against them. This “expose” should be a wake-up call, no more, no less.

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