The latest issue of Business Week has a cover story on Goldman Sachs in which the investment giant attempts to rewrite the narrative of the financial crisis, positioning itself as nothing more than the victim of bad publicity. Reporter Roben Farzad conducts interviews with top-level Goldman employees who all echo the company line:
Goldman did nothing for which it owes anybody an apology"”and it doesn’t owe anybody any money, either. Its brilliance has been wildly overestimated. Goldman managers were smart, but not that smart. Above all, Goldman insists it played by the same rules as everyone else.
Yes, it’s the classic “we’re not evil, just sort of dumb” defense. In addition to this general shirking of responsibility, the execs attempt to rebut a few of the specific charges levied against them. Where critics argue that Goldman “preyed on the poor judgment of AIG by buying more credit-default swaps from the company than it could ever conceivably pay out and then drove the company into insolvency by demanding that it post collateral for its deteriorating positions,” Goldman claims that this was simply a matter of due diligence on its part:
In the end, Goldman asserts, the secret to its success was not that it was smarter than AIG or could divine the future any more clearly or that it had all those government connections that enabled it to get paid in full. Rather, Goldman’s advantage, it says, was that it did the dull, unglamorous work of repricing its securities at true market value, a Goldman hallmark since its days as a tight-knit partnership, when screwups came right out of partners’ capital.
The execs also deny charges that they bet against their own clients by shorting the mortgage market or that they intentionally loaded up their CDOs with toxic mortgages in order to profit from the eventual insurance payout. Rather, they argue that Goldman chose to remain neutral in a time of economic uncertainty and was just trying to service its clients’ needs to the best of its ability. However, critics like Janet Tavakoli argue that these excuses don’t fly:
“Now,” says Tavakoli, indignantly, “Goldman is trying to pretend it didn’t know any better, while also trying to say they are great risk managers. Goldman cannot have it both ways.”
Finally, the Goldman execs bristle at the notion that the company could not have survived without a back-door bailout. In fact, they argue, only $2.5 billion out of the $12.9 billion they received was a new transfer of funds to Goldman itself, with the rest going to close out a loan to AIG and buy up the mortgage securities that it had underwritten. However, the execs maintain that even if they could just give back all the money they received from the AIG bailout, they wouldn’t, because doing so “would be an implicit admission of guilt, and Goldman Sachs isn’t guilty of anything.”
This article is only the opening salvo in a new P.R. offensive intended to dispel the notion that Goldman is “the toxic epicenter of everything wrong with Wall Street.” Since executives at the firm still refuse to offer any apologies or admit that they did anything wrong, that is likely to be an uphill battle. As Roosevelt Institute Braintruster Bill Black tells Farzad, “Every game has a sucker, and in this case, the sucker was not so much AIG as it was the U.S. government and taxpayer.” Here’s hoping that the American people won’t get fooled again.
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The latest issue of Business Week has a cover story on Goldman Sachs in which the investment giant attempts to rewrite the narrative of the financial crisis, positioning itself as nothing more than the victim of bad publicity. Reporter Roben Farzad conducts interviews with top-level Goldman employees who all echo the company line:
Goldman did nothing for which it owes anybody an apology"”and it doesn’t owe anybody any money, either. Its brilliance has been wildly overestimated. Goldman managers were smart, but not that smart. Above all, Goldman insists it played by the same rules as everyone else.
Yes, it’s the classic “we’re not evil, just sort of dumb” defense. In addition to this general shirking of responsibility, the execs attempt to rebut a few of the specific charges levied against them. Where critics argue that Goldman “preyed on the poor judgment of AIG by buying more credit-default swaps from the company than it could ever conceivably pay out and then drove the company into insolvency by demanding that it post collateral for its deteriorating positions,” Goldman claims that this was simply a matter of due diligence on its part:
In the end, Goldman asserts, the secret to its success was not that it was smarter than AIG or could divine the future any more clearly or that it had all those government connections that enabled it to get paid in full. Rather, Goldman’s advantage, it says, was that it did the dull, unglamorous work of repricing its securities at true market value, a Goldman hallmark since its days as a tight-knit partnership, when screwups came right out of partners’ capital.
The execs also deny charges that they bet against their own clients by shorting the mortgage market or that they intentionally loaded up their CDOs with toxic mortgages in order to profit from the eventual insurance payout. Rather, they argue that Goldman chose to remain neutral in a time of economic uncertainty and was just trying to service its clients’ needs to the best of its ability. However, critics like Janet Tavakoli argue that these excuses don’t fly:
“Now,” says Tavakoli, indignantly, “Goldman is trying to pretend it didn’t know any better, while also trying to say they are great risk managers. Goldman cannot have it both ways.”
Finally, the Goldman execs bristle at the notion that the company could not have survived without a back-door bailout. In fact, they argue, only $2.5 billion out of the $12.9 billion they received was a new transfer of funds to Goldman itself, with the rest going to close out a loan to AIG and buy up the mortgage securities that it had underwritten. However, the execs maintain that even if they could just give back all the money they received from the AIG bailout, they wouldn’t, because doing so “would be an implicit admission of guilt, and Goldman Sachs isn’t guilty of anything.”
This article is only the opening salvo in a new P.R. offensive intended to dispel the notion that Goldman is “the toxic epicenter of everything wrong with Wall Street.” Since executives at the firm still refuse to offer any apologies or admit that they did anything wrong, that is likely to be an uphill battle. As Roosevelt Institute Braintruster Bill Black tells Farzad, “Every game has a sucker, and in this case, the sucker was not so much AIG as it was the U.S. government and taxpayer.” Here’s hoping that the American people won’t get fooled again.
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Website
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
The latest issue of Business Week has a cover story on Goldman Sachs in which the investment giant attempts to rewrite the narrative of the financial crisis, positioning itself as nothing more than the victim of bad publicity. Reporter Roben Farzad conducts interviews with top-level Goldman employees who all echo the company line:
Goldman did nothing for which it owes anybody an apology"”and it doesn’t owe anybody any money, either. Its brilliance has been wildly overestimated. Goldman managers were smart, but not that smart. Above all, Goldman insists it played by the same rules as everyone else.
Yes, it’s the classic “we’re not evil, just sort of dumb” defense. In addition to this general shirking of responsibility, the execs attempt to rebut a few of the specific charges levied against them. Where critics argue that Goldman “preyed on the poor judgment of AIG by buying more credit-default swaps from the company than it could ever conceivably pay out and then drove the company into insolvency by demanding that it post collateral for its deteriorating positions,” Goldman claims that this was simply a matter of due diligence on its part:
In the end, Goldman asserts, the secret to its success was not that it was smarter than AIG or could divine the future any more clearly or that it had all those government connections that enabled it to get paid in full. Rather, Goldman’s advantage, it says, was that it did the dull, unglamorous work of repricing its securities at true market value, a Goldman hallmark since its days as a tight-knit partnership, when screwups came right out of partners’ capital.
The execs also deny charges that they bet against their own clients by shorting the mortgage market or that they intentionally loaded up their CDOs with toxic mortgages in order to profit from the eventual insurance payout. Rather, they argue that Goldman chose to remain neutral in a time of economic uncertainty and was just trying to service its clients’ needs to the best of its ability. However, critics like Janet Tavakoli argue that these excuses don’t fly:
“Now,” says Tavakoli, indignantly, “Goldman is trying to pretend it didn’t know any better, while also trying to say they are great risk managers. Goldman cannot have it both ways.”
Finally, the Goldman execs bristle at the notion that the company could not have survived without a back-door bailout. In fact, they argue, only $2.5 billion out of the $12.9 billion they received was a new transfer of funds to Goldman itself, with the rest going to close out a loan to AIG and buy up the mortgage securities that it had underwritten. However, the execs maintain that even if they could just give back all the money they received from the AIG bailout, they wouldn’t, because doing so “would be an implicit admission of guilt, and Goldman Sachs isn’t guilty of anything.”
This article is only the opening salvo in a new P.R. offensive intended to dispel the notion that Goldman is “the toxic epicenter of everything wrong with Wall Street.” Since executives at the firm still refuse to offer any apologies or admit that they did anything wrong, that is likely to be an uphill battle. As Roosevelt Institute Braintruster Bill Black tells Farzad, “Every game has a sucker, and in this case, the sucker was not so much AIG as it was the U.S. government and taxpayer.” Here’s hoping that the American people won’t get fooled again.
Name (required)
Mail (will not be published) (required)
Website
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
The latest issue of Business Week has a cover story on Goldman Sachs in which the investment giant attempts to rewrite the narrative of the financial crisis, positioning itself as nothing more than the victim of bad publicity. Reporter Roben Farzad conducts interviews with top-level Goldman employees who all echo the company line:
Goldman did nothing for which it owes anybody an apology"”and it doesn’t owe anybody any money, either. Its brilliance has been wildly overestimated. Goldman managers were smart, but not that smart. Above all, Goldman insists it played by the same rules as everyone else.
Yes, it’s the classic “we’re not evil, just sort of dumb” defense. In addition to this general shirking of responsibility, the execs attempt to rebut a few of the specific charges levied against them. Where critics argue that Goldman “preyed on the poor judgment of AIG by buying more credit-default swaps from the company than it could ever conceivably pay out and then drove the company into insolvency by demanding that it post collateral for its deteriorating positions,” Goldman claims that this was simply a matter of due diligence on its part:
In the end, Goldman asserts, the secret to its success was not that it was smarter than AIG or could divine the future any more clearly or that it had all those government connections that enabled it to get paid in full. Rather, Goldman’s advantage, it says, was that it did the dull, unglamorous work of repricing its securities at true market value, a Goldman hallmark since its days as a tight-knit partnership, when screwups came right out of partners’ capital.
The execs also deny charges that they bet against their own clients by shorting the mortgage market or that they intentionally loaded up their CDOs with toxic mortgages in order to profit from the eventual insurance payout. Rather, they argue that Goldman chose to remain neutral in a time of economic uncertainty and was just trying to service its clients’ needs to the best of its ability. However, critics like Janet Tavakoli argue that these excuses don’t fly:
“Now,” says Tavakoli, indignantly, “Goldman is trying to pretend it didn’t know any better, while also trying to say they are great risk managers. Goldman cannot have it both ways.”
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