Back from a weekend at the cottage so I have been disconnected from reality since Thursday morning. Now, I have to say something about this Goldman Sachs situation.
Goldman got subpoenaed for bad business practices. Your everyday average American is thinkin’ “YA! FUCK THOSE BANKERS!”. Well I got news for ya… nothing’s gonna happen. I’m sure Matt Taibbi is in his basement right now jerkin’ to the thought of them going down… but–as always–the media is overlooking one of the most important pieces of the puzzle: Goldman’s got some smart motherfuckers. Sure, many (if not the majority of) Americans see the bank as a bunch of scumbags. But if I’m a CFO lookin’ to issue new corporate bonds or an IPO, I’m gonna go to the smartest, most well connected people available. Anyone who denies that Goldman is exactly that has their head up their ass.
Obviously there’s plenty of greedy bastards on Wall Street and elsewhere whowere trying to screw people over before the onset of the crisis. But am I the only one that’s sick of news outlets framing this situation as Goldman “betting against their clients”? When Goldman created Abacus, the now notoriously awful CDO, they weren’t able to sell every part of it. Now I could talk for awhile about my thoughts on this specific case, but that’s for another time. In short, the bank had to hold the parts of the security that it couldn’t get rid of, which opened themselves up to a considerable amount of risk. How do you eliminate that risk? You take the opposite position. In this case, they had to short it. While I’m sure there were plenty of people who thought the market would plummet, I guarantee you there were others right there next to them claiming the party was still happening. So, by shorting these same securities they’re holding (CDS’s, interest rate swaps, whatever) they’re able to reduce some personal risk.
The amount of leverage and systemic risk throughout the banking system was obviously far too irresponsible. In retrospect, there were a lot of bad judgments made leading up to the crisis. But, I don’t think we can start locking people up because they guessed wrong. It truly is a god damn shame that so many people lost money in the financial crisis, but pinning the blame on a few people is just a way for everyone to feel they had no responsibility for the outcome. If there’s still no consensus on the direct cause of the Great Depression, it’s prolly time to focus our efforts on a recovery. I could care less how GS comes out of this, but if there’s one thing I fucking HATE… it’s media spin
Well this coincidence somehow doesn’t surprise me. As I’m writing this I have Fox News on in the background and whatdya know they’re talkin’ about this exact situation. This lady Brenda Buttner is doing exactly what I just pointed out. She is describing the subpoena and says “Goldman bet against its clients, or “shorted” the deals”. Yes… she put quotations around the word “short”. I get that they want to make the situation easier to understand. But tell me that fucking phrase doesn’t force everyone to assume that Goldman is guilty. WOW!!! My blood is fucking BOILING watching this. You are on national TV saying “Goldman designed these securities to fail”. Uhhhh… who the fuck are you? Could you possibly provide some… oh I don’t know… evidence? Ya, Fabrice Tourre got caught with an email calling these “shitty deals”. 4 months after they sold them. As in after they started to plummet. You don’t think their clients did a little bit of research before they bought them and maybe they thought they weren’t gonna fail?
Seriously… this is exactly why I can’t trust half of the shit I hear. Fox isn’t the only one to blame here. Everyone does it. Just once I’d like to hear some actual fact-based news. I’m not some batshit crazy conspiracy theorist, I just can’t stand bullshit. Gimme the facts and I’ll make up my own damn mind.