Goldman Sycophants of the World Unite! You Have Nothing to Lose but Your Non-Existent Reputations!

[marmar]

from Naked Capitalism:




Goldman Sycophants of the World Unite! You Have Nothing to Lose but Your Virtually Non-Existent Reputations!


The Goldman defense against the Levin report is so late and so pathetic that it looks increasingly evident that the bank is simply hoping to blow enough smoke so as to cause confusion and muddy the waters rather than mount a frontal, fact-based rebuttal. Mind you, sniping and innuendo can prove reasonably effective if done persistently and loudly enough. The book Agnotology describes how Big Tobacco managed to sow doubt over decades of the link between smoking and lung cancer well after the medical evidence had gone from suggestive to compelling.

The first Goldman salvo was an Andrew Ross Sorkin piece on Monday which we deemed as unpersuasive. While it did point to an error in the Senate report, it failed to make a real dent the report’s findings, and most important, the notion that Goldman staffers, in particular Lloyd Blankfein, were pretty loose with the truth.

The most contested statement is the Blankfein denial that the firm had a “massive short” position; as Matt Taibbi points out today, the only way out on that one is to get into Clintonesque parsings of the word “massive”. Given the overwhelming evidence that Goldman intended to get out of its mortgage risk in late 2006 and its staff DID get the firm short in February 2007, then reversed that position in March to correctly catch a short term bounce (the market recovered from March to May, when it went into its free fall). And in the March-May period, it was still getting as much crap product out the door and lying to clients about its position in the deals, claiming its incentives were aligned when its effective short position in the deals meant the reverse, that it would profit if they tanked, which they did.

But focusing on the “massive short” issue is misdirection pure and simple. Levin sent the entire report over to prosecutors. He didn’t tell them what legal theories to pursue. There are clearly others a prosecutor could pursue, such as misrepresentations Goldman made in selling CDOs like Hudson and Timberwolf, or other questionable statements made by Blankfein and others in Senate testimony (for instance, as we wrote earlier this week, the Blankfein argument that Goldman was merely a market maker is patently untrue, but probably not worth pursuing in isolation). .............(more)

The complete piece is at: http://www.nakedcapitalism.com/2011/06/goldman-sycophants-of-the-world-unite-you-have-nothing-to-lose-but-your-virtually-non-existant-reputations.html

[xchrom]

1. Recommend

[Fuddnik]

2. Sorkin lost all of his credibility with "Too Big to Fail".

It was nothing but a major blowjob to Paulson, Geithner, and Bernanke.