Goldman's foray into the world of sub-prime mortgage servicing is one that company executives would like relegated to the dumpster along with the water-logged sandbags that shielded their New York HQ from the ravages of Hurricane Sandy.
Voters as well as reporters covering the campaign need to challenge the candidate to provide much more information and many more answers than he's given to date. Otherwise we're left to conclude that he's essentially a shill for the very greediest.
There was something refreshing about Bernie Madoff. He robbed Peters to pay Pauls and it worked well until there were more Pauls than Peters. That is the difference between him and large financial institutions that cheat those with whom they deal. Bernie was not subtle.
With the latest lawsuit, taxpayers might again ask why the Federal Reserve was so eager to bail out all of AIG's deals linked to problematic CDOs at 100 cents on the dollar. The largest beneficiary of that largess was Goldman Sachs.
According to some in the press, the settlement with Goldman was a major victory for the SEC. Initial stories would have you believe that the government ground Goldman to its knees. Almost a blockbuster summer movie.
If history is any guide, Blankfein may not go tomorrow, or even next month, but sometime in 2011, Blankfein will at the very least no longer be chairman of Goldman, and may also be forced out of the firm altogether.
The weaknesses in the S.E.C.'s case against Goldman were obvious. To win, the government needed to prove that Goldman lied, and that the lie mattered. The truth is, the bigger deceptions were not lies, but distractions.
Even if the SEC doesn't insist on Blankfein's ouster, Goldman itself may decide that they best way to get a fresh start is to get a fresh face on the top. That way, the firm can blame all the all the stuff that happened on prior management, and say everything's different now.
As we debate restructuring the financial markets, no legislation nor regulatory reform would rekindle more trust in the markets than a recognition by these behemoths that competing with your own clients is a bad business.
It would all be very amusing if their antics -- "God's work," as Goldman's CEO Lloyd Blankfein described it not long ago -- hadn't cost the country trillions of dollars, and many Americans their jobs, homes and pensions. Not so funny.
It's hard to feel sorry for the most successful investment bank in the world. Given Goldman Sachs' stellar financial performance, you have to ask: Is envy fueling the firestorm of public opinion or is the SEC's view of its conduct legitimate?