The Goldman Sachs Circus

Bloomberg reports that after a brutal grilling by the US congressional committee on allegations of fraud, the investment bank seemed to walk away with an increased market value of over $500m! Talk about the adage of “there’s no such thing as bad press.” In fact, Goldman Sachs was alone “among 79 stocks of the Standard & Poor’s 500 Financial Index in posting a gain yesterday.” Regardless of the this strange turn of events, it seems that both Chief Executive, Lloyd Blankfein and colleague Fabrice ‘Fab’ Tourre have managed to leave this debacle (after a year of probing) disproving actual criminal fraud, and instead suffering the public indignity of having their duplicitous world of investments exposed.

This is really what this media circus is about. True, the governments in the US and UK are talking a big game of regulatory reform but are actually not doing much in terms of real legislation. Instead, they’re exposing to the public some of the double dealing that these ‘professionals’ engage in. It is ironic that the very same public that were being sold “shitty” mortgages (these words were used by a Goldman employee in emails) by the bank, are now betting on them by buying more shares in the bank. There is no morality in finance, it seems – just the brutal bottom line (cue images of a shellac-haired Michael Douglas in Wall Street speaking on a cell phone the size of a cadillac).

When Senator Carl Levin directed an accusation that it was morally reprehensible to knowingly make money selling the public lame mortgages and then betting against them, Blankfein smoothly replied, “What clients or customers are buying is they are buying an exposure.” It seems this very same exposure was coming back to the bank itself, and was oddly helping their cause in mending the wounds that Wall Street has imposed upon Main Street. Or has it? Stay tuned for more action – you know it’s going to come.

William Feins is a freelance journalist currently living in London; He is the main contributor for the Euro Cheddar Blog.

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